56658 Federal Register / Vol. 71, No. 187 / Wednesday, September 27, 2006 / Rules and Regulations 

DEPARTMENT OF COMMERCE 

Economic Development Administration 

13 CFR Chapter III 

[Docket No.: 05072910–6229–06] 

RIN: 0610–AA63 

Economic Development Administration 

Reauthorization Act of 2004 

Implementation; Regulatory Revision 

AGENCY: Economic Development 

Administration, Department of 

Commerce. 

ACTION: Final rule. 

SUMMARY: On August 11, 2005, the 

Economic Development Administration 

(‘‘EDA’’) published an interim final rule 

to reflect the amendments made to 

EDA’s authorizing statute, the Public 

Works and Economic Development Act 

of 1965, by the Economic Development 

Administration Reauthorization Act of 

2004. A ninety-three (93) day public 

comment period followed the 

publication of the interim final rule, 

specifically from August 11, 2005 

through November 14, 2005. On 

December 15, 2005, EDA published an 

interim final rule that amended certain 

provisions of the August 11, 2005 

interim final rule. EDA received a large 

number of public comments on different 

portions of the August 11, 2005 interim 

final rule. This final rule responds to all 

substantive comments received during 

the public comment period and finalizes 

this rulemaking proceeding based on 

comments received during the public 

comment period. 

DATES: This rule is effective as of 

September 27, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Hina Shaikh, Esq., Attorney Advisor, 

Office of Chief Counsel, Economic 

Development Administration, 

Department of Commerce, Room 7005, 

1401 Constitution Avenue, NW., 

Washington DC 20230; telephone: (202) 

482–4687. 

SUPPLEMENTARY INFORMATION: 

Background 

EDA published an interim final rule 

in the Federal Register (70 FR 47002) on 

August 11, 2005 (the ‘‘Interim Final 

Rule’’). The Interim Final Rule reflects 

the amendments made to EDA’s 

authorizing statute, the Public Works 

and Economic Development Act of 1965 

(42 U.S.C. 3121 et seq.) (‘‘PWEDA’’), by 

the Economic Development 

Administration Reauthorization Act of 

2004 (Pub. L. 108–373, 118 Stat. 1756 

(2004)) (the ‘‘2004 Act’’). In addition, 

the Interim Final Rule reflects EDA’s 

current practices and policies in 

administering its economic 

development programs that have 

evolved since the promulgation of 

EDA’s former regulations. The Interim 

Final Rule provided for a public 

comment period from August 11, 2005 

through October 11, 2005. EDA also 

held a public hearing on September 1, 

2005 on the Interim Final Rule. 

On September 30, 2005, EDA 

published a final rule (70 FR 57124) that 

extended the deadline for submitting 

public comments on the Interim Final 

Rule from October 11, 2005 until 

November 14, 2005. The September 30, 

2005 final rule also delayed the effective 

date, from October 1, 2005 until 

November 14, 2005, of (i) § 304.2(c)(2) of 

the Interim Final Rule, pertaining to 

membership requirements of a District 

Organization’s governing body; and (ii) 

§ 301.4 of the Interim Final Rule, as the 

provisions of this section pertain to 

Investment Rates for EDA Planning 

Investments. On November 14, 2005, 

EDA published another final rule (70 FR 

69053) delaying the effective date of 

these provisions from November 14, 

2005 until January 31, 2006. All other 

provisions of the Interim Final Rule 

became effective on October 1, 2005. 

The conference report (H.R. Rep. No. 

109–272, at 136–138 (2006) (Conf. Rep.); 

the ‘‘Conference Report’’) accompanying 

the FY 2006 Science, State, Justice, 

Commerce and Related Agencies 

Appropriations Act (Pub. L. 109–108, 

119 Stat. 2290 (2005)) (the ‘‘2006 

Appropriations Act’’) expressed 

Congressional intent as to specific 

provisions of the Interim Final Rule. On 

December 15, 2005, EDA published an 

interim final rule (70 FR 74193) to 

immediately effect only those changes 

to the Interim Final Rule specified in 

the Conference Report (the ‘‘December 

15, 2005 Rulemaking’’). 

After receiving extensive input from 

stakeholders, EDA is publishing this 

final rule to respond to all comments 

received during the public comment 

period on all aspects of the Interim 

Final Rule, and to make additional 

revisions. The majority of public 

comments were part of a mass mailing 

campaign, which resulted in EDA 

receiving hundreds of identical or 

nearly identical pieces of mail in a 

calendar month. For the most part, these 

comments expressed opinions on 13 

CFR parts 300, 301, 302, 303, 304 and 

307. This final rule also explains 

changes made to the Interim Final Rule 

in response to the Congressional 

recommendations set forth in the 

Conference Report and effected by the 

December 15, 2005 Rulemaking. 

Capitalized terms used but not 

otherwise defined in this final rule have 

the meanings ascribed to them in the 

Interim Final Rule (see, e.g., 13 CFR 

300.3, 303.2, 307.8, 314.1 and 315.2). 

Specifically, this final rule makes the 

following revisions to the Interim Final 

Rule: 

Part 300—General Information 

Part 300 of the regulations specifically 

states EDA’s mission and highlights the 

policies and practices that EDA employs 

in order to attract private capital 

investments and higher-skill, higherwage jobs to those Regions experiencing 

substantial and persistent economic 

distress. In drafting the Interim Final 

Rule, the main revisions occurred in 

§ 300.3, in which EDA introduced 

several new terms and revised existing 

terms. Anticipating that an improved 

section of definitions would assist 

readers in better understanding EDA’s 

policies and requirements, EDA 

increased the number of defined terms 

to ensure clarity, consistency and 

technical precision. 

This final rule further revises part 300 

of the Interim Final Rule by inserting 

the word ‘‘development’’ between the 

words ‘‘economic’’ and ‘‘agenda’’ in the 

second sentence in § 300.1, to clarify 

that EDA’s mission is to lead sustainable 

economic development throughout the 

United States. 

EDA received one comment 

expressing difficulty in understanding 

the difference between the definitions of 

‘‘District Organization’’ and ‘‘Economic 

Development District.’’ EDA believes 

that both terms are explained clearly in 

the Interim Final Rule and, therefore, 

this final rule does not amend these 

terms. A District Organization is any 

organization that meets the 

requirements of § 304.2. The definition 

of Economic Development District 

conveys that EDA may (at the request of 

a District Organization) designate a 

geographic area, or a ‘‘Region,’’ as an 

Economic Development District if the 

Region satisfies the requirements of 

§ 304.1. This final rule adds a minor 

clarifying point to the definition of 

Economic Development District to make 

clear that Districts designated prior to 

the effective date of the Interim Final 

Rule would have been designated 

pursuant to a previous version of this 

regulation at 13 CFR part 302. 

We received five comments that 

stated the following: ‘‘Part 300 

eliminates the EDD designation and 

replaces it with ‘District Organization’ 

and specifically adds reference to 

‘community or faith-based non-profit 

organization.’ With numerous unfunded 

and under-funded EDDs around the 

nation[,] expanding the number of new 


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eligible recipients is not prudent use of 

already limited funding.’’ The Interim 

Final Rule replaced the reference to an 

Economic Development District in the 

definition of ‘‘Eligible Recipient’’ with 

the term ‘‘District Organization’’

because a District Organization may 

apply for and receive EDA Investment 

Assistance. In contrast, an Economic 

Development District is a geographic 

description and cannot apply for EDA 

Investment Assistance until it 

establishes a structure to give voice to 

the interests in that Region. EDA has 

included faith-based organizations in its 

investment portfolio since 

approximately 1969; therefore, the 

Interim Final Rule did not expand the 

number of new Eligible Recipients. 

Rather, the Interim Final Rule 

demonstrates EDA’s commitment to 

making its programs fully available to 

community and faith-based 

organizations by specifically identifying 

these non-profit organizations as 

Eligible Recipients. For these reasons, 

this final rule does not amend the 

definition of Eligible Recipient. 

This final rule replaces the lead-in 

statement for the defined term Eligible 

Recipient to ‘‘Eligible Recipient means 

any of the following:’’, and clarifies that 

a consortium of Indian Tribes is 

qualified to be an Eligible Recipient, 

similar to consortia of political 

subdivisions and institutions of higher 

education. EDA did not intend to 

exclude a consortium of Indian Tribes 

from the definition of Eligible Recipient; 

this language was inadvertently 

dropped from the text of the Interim 

Final Rule. Additionally, the definition 

of ‘‘In-Kind Contributions’’ is revised by 

replacing the phrase ‘‘Uniform 

Administrative Requirements of 15 CFR 

parts 14 and 24 (as applicable)’’ with the 

phrase ‘‘requirements of 15 CFR parts 14 

or 24, as applicable.’’ This final rule also 

expands the definition of ‘‘Indian Tribe’’

to include a non-profit Indian 

corporation, Indian authority and other 

non-profit Indian tribal organization or 

entity, provided that the tribal 

organization or entity is wholly owned 

by, and established for the benefit of, 

the Indian tribe. This language was 

inadvertently dropped in the Interim 

Final Rule. EDA makes expressly clear 

that these types of organizations are 

included in the definition of Indian 

Tribe, consistent with the definition of 

Indian Tribe in EDA’s former 

regulations. 

EDA received no public comments on 

the defined term ‘‘Private Sector 

Representative’’ in the Interim Final 

Rule. However, the Conference Report 

accompanying the 2006 Appropriations 

Act included a specific direction by 

Congress for EDA to expand the 

definition of Private Sector 

Representative. Accordingly, the 

December 15, 2005 Rulemaking 

expanded the definition to include a 

designee of any senior management 

official or executive holding a key 

decision-making position in any forprofit enterprise. 

EDA received one question regarding 

‘‘whether the other Federal grant 

programs will allow EDA funds to 

match their programs.’’ Section 205 of 

PWEDA (42 U.S.C. 3145) and § 301.6 of 

the Interim Final Rule authorize EDA to 

supplement a grant awarded in another 

designated Federal grant program up to 

the amount of the maximum allowable 

EDA investment rate, even if the other 

Federal grant program has a lower grant 

rate. An applicant should contact the 

Federal Agency making the grant award 

to determine if its governing statute 

conflicts with PWEDA. 

EDA received approximately 84 

identical comments stating, ‘‘While we 

appreciate the theory and practice of 

forging local partnerships based on 

shared economic interests of a ‘region,’

the creation of competing regional 

boundaries and definitions is confusing 

and misleading.’’ This final rule does 

not amend the definition of Region or 

the term ‘‘Regional’’ because it 

sufficiently explains that self-sustained 

economic development should occur 

across communities and political 

boundaries. EDA believes that Regional 

partnerships, with human, natural, 

technological and capital components, 

are essential to the economic 

competitiveness of a Region. 

EDA received one comment on the 

definition of ‘‘Special Need’’ in § 300.3. 

The commenter noticed a discrepancy 

between the phrase ‘‘closure or 

restructuring of industrial firms’’ in the 

definition of Special Need and the 

phrase ‘‘loss of a major community 

employer’’ in the list of circumstances 

set forth in § 307.1. In response to this 

comment, this final rule adds to the 

definition of Special Need the 

circumstance of a Region losing a major 

employer. 

Part 301—Eligibility, Investment Rate 

and Proposal and Application 

Requirements 

Part 301 of the regulations sets forth 

eligibility, maximum allowable 

Investment Rate levels, and proposal 

and application requirements common 

to all PWEDA-enumerated programs 

(excluding Trade Adjustment Assistance 

for Firms at part 315). Part 301 presents 

these requirements in a more logical 

sequence than EDA’s former regulations 

and provides the user with a helpful 

roadmap to navigate through these 

threshold issues. 

In general, subpart A presents an 

overview of eligibility requirements, 

subpart B addresses applicant 

eligibility, subpart C addresses Regional 

economic distress level requirements, 

subpart D sets forth the maximum 

allowable Investment Rates and 

corresponding Matching Share 

requirements for various Projects, and 

subpart E addresses the proposal and 

application requirements, as well as the 

evaluation criteria used by EDA in 

selecting Projects. 

The economic distress criteria 

referenced in § 301.3(a) for Projects 

under parts 305 and 307 track sections 

301 and 405 of PWEDA (42 U.S.C. 3161 

and 3175). EDA received one comment 

stating that, ‘‘Requiring the per capita 

income to be eighty (80) percent or less 

of the national average [per capita 

income] will result in ineligibility of 

distressed areas located in higher 

income areas such as the northeast 

United States.’’ This final rule does not 

amend § 301.3(a)(1)(ii) because it 

reflects the statutory provision set forth 

in section 301(a)(1) of PWEDA (42 

U.S.C. 3161), which provides that for a 

Project to be eligible for a Public Works 

or Economic Adjustment Assistance 

Investment, the Project must be located 

in a Region that meets one or more of 

the following economic distress criteria: 

(i) Per capita income of 80 percent or 

less of the national average; (ii) an 

unemployment rate that is at least one 

percent greater than the national 

average; or (iii) a Special Need, as 

determined by EDA. 

EDA received approximately 100 

identical or nearly identical comments 

on § 301.3(a)(4)(i), which provides that 

EDA will determine economic distress 

levels according to unemployment rates 

or per capita income levels based upon 

the most recent American Community 

Survey (‘‘ACS’’) published by the U.S. 

Census Bureau for (i) the applicable 

Region where the Project will be located 

(for Projects seeking to qualify under 

§ 301.3(a)(1)), (ii) the geographic area 

where substantial direct Project benefits 

will occur (for Projects seeking to 

qualify under § 301.3(a)(2)), or (iii) the 

geographic area of poverty or 

unemployment (for Projects seeking to 

qualify under § 301.3(a)(3)). These 

comments stated, ‘‘While we support 

the concept of the ACS tool, the vast 

majority of the nation’s small 

metropolitan and rural communities are 

years away from having access to ACS 

data.’’

While EDA understands that the ACS 

is still not available for some 

geographies (e.g., census tracts, 


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townships, or certain cities and 

counties), EDA believes that the ACS is 

the most accurate and reliable metric 

currently available to measure the 

economic distress of a Region (or other 

geographic area). Where a recent ACS is 

not yet available, or will not be 

available, the regulation makes clear 

that EDA will use the most recent 

Federal data from other sources, 

including data available from the 

Census Bureau and the Bureaus of 

Economic Analysis, Labor Statistics, 

Indian Affairs or any other Federal 

source determined by EDA to be 

appropriate. For improved clarity and 

understanding, this final rule amends 

the last sentence in § 301.3(a)(4)(i) by 

rephrasing ‘‘the most recent data 

available through the government of the 

State in which the Region is located’’ as 

‘‘the most recent data available from the 

State.’’

For economic distress based upon a 

Special Need, EDA will conduct an 

independent analysis of the facts and 

circumstances in a given case. See 

§ 301.3(a)(4)(ii). 

Section 301.4 reflects the new 

Investment Rate determination structure 

in section 204 of PWEDA (42 U.S.C. 

3144; see also sections 205 and 206 of 

PWEDA (42 U.S.C. 3145 and 3146)). 

Generally, as stated in section 204(a) of 

PWEDA and in § 301.4(b)(1), the 

maximum Investment Rate for a Project 

must not exceed the sum of fifty (50) 

percent, plus an additional thirty (30) 

percent, based on the ‘‘relative needs’’

of the Region where the Project is 

located. 

EDA received approximately 812 

identical or nearly identical comments 

on the Investment Rate provisions for all 

EDA programs. The majority of these 

comments stated: ‘‘We are very 

concerned about changes to EDA 

matching rates for all agency 

investments, including planning grants, 

public works investments and economic 

adjustment assistance. We fear the 

increased costs to our local 

communities for both EDA planning 

grants and infrastructure projects will 

put our future economic progress in 

jeopardy.’’ We received approximately 

153 comments that opposed the change 

in EDA Investment Rates for Planning 

grants only. These comments stated that 

the ‘‘new range from a minimum of 30% 

Federal to 70% local to a maximum of 

80% Federal and 20% local’’ is likely to 

put a greater financial burden on rural 

local governments. The December 15, 

2005 Rulemaking addressed these two 

sets of comments, as described in detail 

below. 

In the Interim Final Rule, EDA 

provided maximum allowable 

Investment Rate categories of 30% and 

40% for those Regions eligible for 

Investment Assistance under PWEDA, 

but which are experiencing lower levels 

of economic distress. The Conference 

Report accompanying the 2006 

Appropriations Act directed EDA to 

revise this regulation. Accordingly, the 

December 15, 2005 Rulemaking 

provided that Projects located in 

Regions demonstrating (i) a 24-month 

unemployment rate at least 1% greater 

than the national average or (ii) per 

capita income not more than 80% of the 

national average will be eligible to 

receive a maximum allowable 

Investment Rate of 50%. This revision 

eliminated the 30% and 40% maximum 

allowable Investment Rate categories. 

The higher threshold levels of economic 

distress for the 60%, 70% and 80% 

maximum allowable Investment Rate 

categories remain the same as provided 

in the Interim Final Rule. 

The December 15, 2005 Rulemaking 

also revised § 301.4(b) to the extent that 

it applies to Planning Investments, by 

placing a subsection titled Projects 

under part 303 at § 301.4(b)(3), which 

includes the following provisions for 

determining the Investment Rates for 

Planning Investments: (i) All Planning 

Investments will receive a minimum 

Investment Rate of 50%; (ii) except as 

otherwise provided in section 204(c) of 

PWEDA (42 U.S.C. 3144) and 

§ 301.4(b)(5), the maximum allowable 

Investment Rate for Planning 

Investments will be the maximum 

allowable Investment Rate set forth in 

Table 1 of § 301.4 for the most 

economically distressed county or other 

equivalent political unit (e.g., parish) 

within the Region; (iii) the maximum 

allowable Investment Rate will not 

exceed 80%; and (iv) in compelling 

circumstances, the Assistant Secretary 

may waive the requirement in paragraph 

(ii) above. The Assistant Secretary 

cannot delegate the authority to grant 

this waiver. 

This final rule revises § 301.4(b)(2) by 

replacing the phrase ‘‘paragraphs (b)(3) 

and (4)’’ with ‘‘paragraph (b)(5).’’

References to paragraphs (b)(3) and 

(b)(4) were inapplicable in the Interim 

Final Rule, as Special Need Projects 

concern Investments under parts 305 

and 307 only. Such Projects are, 

however, eligible for a maximum 

allowable Investment Rate of one 

hundred (100) percent under 

§ 301.4(b)(5). For subject-verb 

agreement, this final rule also revises 

Table 2 of § 301.4 by amending the 

phrase ‘‘Projects of non-profit 

organizations that the Assistant 

Secretary determines has exhausted its 

effective borrowing capacity’’ to 

‘‘Projects of non-profit organizations 

that the Assistant Secretary determines 

have exhausted their effective 

borrowing capacity.’’

Additionally, this final rule revises 

§ 301.7 by replacing the phrase ‘‘an EDA 

Pre-application for Federal Assistance’’

with the phrase ‘‘a Pre-application for 

Investment Assistance.’’ This 

amendment corresponds to a similar 

change EDA made to the title of its preapplication (Form ED–900P) after 

publication of the Interim Final Rule. 

This final rule also designates the 

paragraph under § 301.7 as (a) and redesignates provisions (a), (b) and (c) as 

(1), (2) and (3), in order to add a second 

paragraph (b) which states that for 

certain programs, EDA may instruct an 

Eligible Applicant to submit an 

application for Investment Assistance in 

lieu of the pre-application for 

Investment Assistance. EDA adds this 

provision to ensure clarity regarding 

EDA’s proposal and application 

requirements. 

To clarify the distinction between 

proposal evaluation criteria and 

proposal selection criteria, this final 

rule deletes the third sentence in § 301.8 

in its entirety, and replaces the phrase 

‘‘the applicable FFO’’ in § 301.9(a)(3) 

with ‘‘the funding priority 

considerations identified in the 

applicable FFO.’’ In the lead-in 

statement to paragraphs (a) through (e) 

of § 301.8, we also replace the word 

‘‘may’’ with ‘‘will,’’ to have consonant 

wording with relevant FFOs. This final 

rule also adds the word ‘‘criteria’’ to the 

title of § 301.9. 

Part 302—General Terms and 

Conditions for Investment Assistance 

Part 302 sets forth the general terms 

and conditions for EDA Investment 

Assistance. The majority of provisions 

in this part were transferred from part 

316 of EDA’s former regulations. Part 

302 applies to all Investments under 

PWEDA and certain provisions, such as 

§ 302.5, apply to the Trade Adjustment 

Assistance for Firms program under the 

Trade Act (see part 315). This part 

covers a variety of EDA requirements for 

Investment Assistance, including 

environmental reviews of Projects, 

relocation assistance and land 

acquisition requirements, intergovernmental review of Projects, and 

Recipients’ reporting, record-keeping, 

post-approval and civil rights 

requirements. EDA received no public 

comments on §§ 302.1 through 302.15 of 

the Interim Final Rule. For consistency 

throughout the chapter, this final rule 

amends the last sentence in § 302.1 by 

replacing the phrase ‘‘annual FFO’’ with 

‘‘applicable FFO.’’ This final rule makes 


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no further revisions to §§ 302.1 through 

302.15. 

EDA received approximately 109 

identical or nearly identical comments 

on § 302.16(b) of the Interim Final Rule, 

in connection with Recipients’ reporting 

requirements. This section implements 

section 212 of PWEDA (42 U.S.C. 3152), 

which requires recipients to submit 

reports that contain an evaluation of the 

effectiveness of the investment 

assistance provided under PWEDA. 

These comments expressed concern 

‘‘about the new requirement that all 

performance data and information 

submitted by grantees be from 

independent sources.’’ Subsection 

302.16(b) provides that data used by 

Recipients in preparing reports must be 

accurate and verifiable, as determined 

by EDA, and must come from 

independent sources (whenever 

possible). While EDA appreciates that 

locating independent sources has time 

and cost implications, we believe it is 

very important that the data used by a 

Recipient is verified when possible by a 

reliable source independent of the 

Recipient. The Recipient is the primary 

source for information on the 

effectiveness of the Investment 

Assistance provided and fulfillment of 

the objectives of PWEDA, and therefore, 

reported data must be accurate and 

verifiable as determined by EDA. 

Whenever possible, the Recipient 

should cross-check these data with an 

independent secondary source to avoid 

conscious or unconscious biases and 

errors. For the reasons stated above, this 

final rule does not change § 302.16(b). 

Section 302.17 of the regulations 

states EDA’s conflicts of interest policy. 

In the Interim Final Rule, EDA moved 

the conflicts of interest provisions for 

revolving loan fund (‘‘RLF’’) Grants from 

§ 308.15(e) of EDA’s former regulations 

to § 302.17(c) to improve organization 

and referencing facility. EDA received 

approximately 87 identical or nearly 

identical comments on § 302.17(c)(3), 

which provides that former board 

members of a Recipient of an RLF Grant 

and members of his or her Immediate 

Family cannot receive a loan from the 

RLF for a period of two years from the 

date that the board member last served 

on the RLF’s board of directors. 

Generally, these comments expressed 

opposition to ‘‘the change in the waiting 

period from one year to two years, along 

with the elimination of the ‘exemption 

clause’ with [regard to] public 

disclosure.’’ Some comments also 

expressed concern that § 302.17(c)(3) 

‘‘place[s] an undue burden on those 

individuals that serve in the local public 

arena and are now unable to participate 

in the RLF for a proposed two year 

period.’’

EDA does not intend for § 302.17(c)(3) 

to burden or penalize local community 

business participants for their 

membership on a District Organization’s 

governing body or on an RLF 

Recipient’s board of directors. We 

increased the one-year period to a twoyear period in § 302.17(c)(3) to be 

consistent with section 606 of PWEDA 

(42 U.S.C. 3216), which directs an 

Eligible Applicant to execute a binding 

agreement, for the two-year period 

beginning on the date on which the 

Investment Assistance is awarded, 

requiring it to refrain from employing, 

offering any office or employment to, or 

retaining for professional services, 

certain persons associated with EDA or 

the Department. Because of the 

importance of section 606 of PWEDA, 

EDA’s formal application for Investment 

Assistance includes a certification that 

must be signed by an authorized official 

of the Eligible Applicant. 

Similarly, § 302.17(c)(3) prohibits the 

conduct of any business (e.g., the 

issuance of an RLF loan) by a former 

RLF Recipient board member and the 

RLF Recipient for a two-year period 

after leaving the board member position. 

As a general matter, if a potential or 

actual conflict arises, a former RLF 

Recipient board member has a fiduciary 

duty to disclose the conflict. We 

removed the conflict waiver exception 

found in § 308.15(e) of EDA’s former 

regulations because public disclosure of 

an actual or potential conflict, 

regardless of whether the benefit 

conferred is substantial or de minimus, 

can potentially damage the credibility of 

the RLF Recipient’s decision-making 

process. The removal of the conflict 

waiver exception makes EDA’s conflicts 

of interest rules for RLFs consistent with 

its general conflicts of interest policy 

(see § 302.17(a)). For these reasons, this 

final rule does not amend § 302.17(c)(3). 

EDA received no comments on the 

conflicts of interest provisions for the 

Trade Adjustment Assistance for Firms 

program, as set forth in § 315.15. 

EDA received no public comments on 

§§ 302.18 through 302.20 of the Interim 

Final Rule. These sections of part 302 

remain as provided in the Interim Final 

Rule. 

Part 303—Planning Investments and 

Comprehensive Economic Development 

Strategies 

Part 303 was revised in the Interim 

Final Rule to emphasize that resultsdriven implementation, not just the 

writing of a ‘‘Comprehensive Economic 

Development Strategy’’ (or ‘‘CEDS’’), is 

vital to successful performance under 

EDA’s Planning program. The CEDS is 

a crucial part of EDA’s program 

portfolio and is required to be in place 

before a Recipient may receive a Public 

Works Investment or Economic 

Adjustment Assistance under parts 305 

or 307. Part 303 discusses the 

application and award requirements for 

Planning Investments and the 

requirements for CEDS, State plans and 

short-term Planning Investments. 

To ensure clarity, this final rule 

revises the first sentence in § 303.1 by 

amending the phrase ‘‘related to shortterm Planning Investments and State 

plans’’ to ‘‘and for related short-term 

Planning Investments and State plans.’’

For consistency with the definition of 

Eligible Recipient in § 300.3, this final 

rule also amends the second sentence in 

§ 303.1 by replacing the phrase 

‘‘Economic Development Districts’’ with 

‘‘District Organizations.’’ We received 

one comment stating that § 303.1 

‘‘expand[s] eligibility for planning 

assistance to community development 

corporations and non-profit regional 

development organizations.’’ EDA did 

not expand the list of Eligible Recipients 

for Planning Investments because public 

and private non-profit organizations 

already are included in the definition of 

Eligible Recipient in § 300.3. Rather, we 

included community development 

corporations and non-profit regional 

development organizations in our 

introductory discussion addressing the 

purpose and scope of Planning 

Investments. 

We received approximately 130 

identical comments expressing 

‘‘concern about several of the 

application requirements, including the 

primary focus on creating ‘higher-skill, 

higher-wage jobs’ and involving 

business leaders in every phase of the 

CEDS process.’’ Section 303.1 states that 

the purpose of EDA Planning 

Investments in part includes assistance 

for short-term Planning Investments and 

State plans designed to create and retain 

higher-skill, higher-wage jobs. EDA 

believes this goal must be achieved 

particularly in the most economically 

distressed Regions, as that is where high 

levels of unemployment and 

underemployment exist. Additionally, 

in considering an application for a 

Planning Investment under § 303.3(a), 

EDA will consider the involvement of 

the Region’s business leadership in the 

preparation of the CEDS, short-term 

planning activities, or in the 

development of State plans. In line with 

its goal of fostering Regional 

partnerships, EDA believes that 

communities and Regions must access 

expert resources and interact with 

business leaders and entrepreneurs in 


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order to improve their economy and to 

create private sector jobs. 

EDA received approximately 136 

identical comments on the definition of 

‘‘Planning Organization’’ found in 

§ 303.2, which expressed strong 

opposition to ‘‘the removal of the 

specific reference to District 

Organizations and Indian tribes as the 

primary planning partners of the 

agency.’’ The Interim Final Rule 

simplified the former definition of 

Planning Organization by replacing the 

references to Economic Development 

Districts and Indian Tribes with the 

term ‘‘Recipient.’’ The definition of 

Eligible Recipient in § 300.3 includes 

District Organizations and Indian 

Tribes; therefore, the definition of 

Planning Organization in § 303.2 

involves no substantive change from 

EDA’s former regulations. To clarify the 

functions of a Planning Organization, 

this final rule amends the definition of 

Planning Organization by inserting the 

phrase ‘‘and implement’’ after the word 

‘‘develop.’’

EDA received two comments on the 

application requirements for Planning 

Investments set forth in § 303.3(a). The 

comments expressed, ‘‘It seems 

redundant to require a ‘pre-application’

when seeking a planning grant, as 

mentioned in the interim final rule; it 

seems that this is unnecessary with the 

mid-year and annual reports required 

currently.’’ The commenters questioned 

whether a pre-application for 

Investment Assistance is necessary for 

all Planning Investments. By adding a 

new subsection to § 301.7 as discussed 

in detail above, EDA makes it clear in 

this final rule that in certain 

circumstances, EDA may instruct an 

Eligible Applicant or Recipient to 

submit an application for Investment 

Assistance rather than a pre-application. 

To ensure that the title of § 303.3 

conforms to its content, this final rule 

adds ‘‘and evaluation criteria’’ to the 

title. In addition, we restate the lead-in 

statement for paragraphs (a)(1) through 

(5) as ‘‘In addition, applications for 

Planning Investments must include 

information about the following,’’ and 

delete the phrase ‘‘Quality of’’ in 

paragraph (a)(1) to make clear that EDA 

requires Eligible Applicants to provide 

the information described in § 303.3(a) 

for all Planning Investment 

applications. We also make a 

grammatical revision to § 303.3(a)(5) by 

replacing the word ‘‘during’’ with 

‘‘through.’’

Section 303.3(b) provides that funded 

Recipients will be evaluated on the 

extent of continuing distress within the 

Region, their past performance, and the 

overall effectiveness of their CEDS. For 

conformity with the revisions we make 

to § 303.3(a) in this final rule, we 

replace the phrase ‘‘requirements of’’

with ‘‘criteria set forth in’’ in § 303.3(b). 

We received approximately 212 

comments on § 303.4(c). The majority of 

these comments expressed ‘‘concern 

about the lack of details on the funding 

of [P]lanning grants’’ and stated that the 

Interim Final Rule is ‘‘vague on the link 

between receiving a designation as a 

District Organization and annual and 

long-term financial support from EDA.’’

EDA did not intend for § 303.4(c) to 

suggest that Investment Assistance to 

Planning Organizations would be ‘‘onetime only’’ awards. We fully expect to 

continue our successful partnership 

with Planning Organizations 

representing Economic Development 

Districts (as well as to fund designated 

but unfunded Districts). This final rule 

clarifies the regulation by stating that 

EDA will provide a Planning Investment 

for the period of time required to 

develop, revise or replace, and 

implement a CEDS, generally in ‘‘thirtysix (36) month renewable Investment 

award periods.’’ The phrase ‘‘thirty-six 

(36) month renewable Investment award 

periods’’ clarifies that the regulation 

contemplates continuation of EDA’s 

historic relationship with Districts. 

Consistent with the focus on 

obtaining a well-prepared and 

demonstrable CEDS, § 303.5 provides 

that Planning Investments may be used 

to pay only direct and indirect costs 

(administrative or otherwise) 

attributable to the development and 

implementation of a CEDS. EDA 

received approximately 279 identical or 

nearly identical comments on this 

provision, which expressed strong 

opposition to limiting direct and 

indirect costs to activities related to the 

CEDS. As provided in § 303.5(a), EDA 

determines allowable costs by reference 

to ‘‘applicable Federal cost principles,’’

namely, the following Office of 

Management and Budget (‘‘OMB’’) 

Circulars: Circular No. A–122 titled 

‘‘Cost Principles for Nonprofit 

Organizations’’ (2 CFR part 230); 

Circular No. A–21 titled ‘‘Cost 

Principles for Education Institutions’’ (2 

CFR part 220); and Circular No. A–87 

titled ‘‘Cost Principles for State, Local 

and Indian Tribal Governments’’ (2 CFR 

part 225). Upon closer examination of 

§ 303.5, EDA believes subsection (c) 

regarding allowable ‘‘indirect costs’’ is 

superfluous inasmuch as these costs 

would be eligible consistent with EDA’s 

application of these OMB circulars to 

indirect cost rates. Therefore, this final 

rule removes § 303.5(c) in its entirety. 

This final rule also removes § 303.5(b) 

in its entirety because the express 

statement that Planning Investments 

may only be used to pay the costs 

attributable to the EDA-approved scope 

of work (i.e., for the purpose of 

developing and implementing a CEDS) 

does not distinguish Planning 

Investments from any other EDA 

Investment. Generally, all EDA 

Investment Assistance may be used to 

pay costs of activities that are directly 

attributable to the Project’s scope of 

work. To ensure clarity and better 

understanding of the concepts 

explained above, this final rule 

reformats § 303.5 and revises the 

sentence to indicate that Planning 

Investments may be used to pay the 

direct and indirect costs incurred by a 

Planning Organization in the 

development, replacement or revision, 

and implementation of a CEDS and for 

related short-term planning activities. 

Rewritten in this manner, EDA believes 

§ 303.5 is consistent with the Senate 

Report accompanying the 2004 Act, 

which states that authorized uses of 

funds under section 203 of PWEDA 

include ‘‘administrative expenses to 

support the on-going formulation and 

implementation of comprehensive 

economic development strategies.’’ S. 

Rep. No. 108–382, at 4 (2004). 

Section 303.6(a) requires that a 

Strategy Committee (appointed by a 

Planning Organization) represent the 

main economic interests of the relevant 

Region by including a majority of its 

representatives from businesses within 

the Region. The Strategy Committee is 

tasked with developing (and revising or 

replacing as necessary) the Planning 

Organization’s CEDS. EDA received 

approximately 585 identical or nearly 

identical comments on § 303.6(a), which 

expressed strong ‘‘oppos[ition] to efforts 

[that] reduce the involvement and 

control of local government officials in 

strategic planning and development 

activities.’’ In order to sustain long-term 

Regional economic growth, EDA 

believes that contributions from the 

private sector are paramount for the 

CEDS development. We do not believe 

this requirement is restrictive or that it 

minimizes local government 

participation in local development 

activities. Rather, when § 303.6(a) is 

read in its entirety, it requires that 

innovative public and private leaders 

create a strong sense of Regional 

cooperation in order to develop a viable 

CEDS. 

We received one comment on 

§ 303.6(c). This section requires 

Planning Organizations to be 

accountable to EDA for updated CEDS 

performance. The commenter opined 

that this provision ‘‘does not go far 

enough,’’ and stated that ‘‘[t]here needs 


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to be some requirement that [Planning] 

[O]rganizations put a plan for selfsufficiency in each CEDS, and that they 

attain self-sufficiency within 10 years of 

first receiving EDA Investment 

Assistance.’’ EDA does not intend to 

implement such a requirement absent 

Congressional authorization. 

To improve the structure of § 303.7(a) 

and improve readability, this final rule 

amends the second sentence in 

§ 303.7(a) by deleting the phrase ‘‘, and 

assigning lead organizations 

responsibilities for execution of the 

CEDS’’ and placing ‘‘and’’ before the 

word ‘‘identifying.’’ We received one 

comment asking for EDA to define the 

word ‘‘critical’’ in the last sentence of 

§ 303.7(a). This final rule does not revise 

this sentence in § 303.7(a) at this time 

because EDA believes it sufficiently 

relates that the creation of a successful 

CEDS depends heavily on its 

participants. If CEDS development 

galvanizes a partnership between 

business and government, it will play a 

‘‘critical’’ or essential role in enabling 

and strengthening Regional economies. 

Section 303.7(b) lists specific 

technical requirements related to the 

preparation of the CEDS document. 

These requirements include (i) a 

discussion of private sector 

participation in the CEDS work, rather 

than community participation, (ii) a 

specific plan of action with certain 

criteria for gauging the implementation 

of the goals and objectives of the CEDS, 

and (iii) specific performance measures 

for appraising the Planning 

Organization’s development and 

execution of the CEDS. We received 

approximately 83 identical comments 

stating support of these requirements. 

The commenters stated that ‘‘the new 

technical requirements of the CEDS 

process are sound and beneficial to local 

development efforts.’’ This final rule 

amends § 303.7(b)(7) by replacing the 

phrase, ‘‘A section identifying economic 

clusters that are growing or in decline 

within the Region’’ with ‘‘A section 

identifying economic clusters within the 

Region, focusing on those that are 

growing or in decline.’’ We revise 

§ 303.7(b)(7) as such to clarify that 

Planning Organizations should identify 

all economic clusters in the Region and 

specify those that are growing or in 

decline. For clarity, we also insert the 

word ‘‘development’’ after ‘‘economic’’

in § 303.7(b)(10). 

Section 303.9 outlines EDA’s 

requirements for short-term Planning 

Investment Assistance. This final rule 

amends § 303.9(c) by replacing the 

phrase ‘‘program reports’’ with 

‘‘progress reports,’’ as the incorrect use 

of the word ‘‘program’’ in the Interim 

Final Rule was an oversight. 

EDA received two comments 

expressing that part 303 ‘‘focus[es] 

solely on the CEDS without clearly 

defining who will be responsible for 

implementation of the [CEDS].’’ As 

noted earlier, the Strategy Committee is 

tasked with developing (and revising or 

replacing as necessary) the CEDS. EDA 

believes it is the responsibility of the 

District Organization as a whole to 

implement the technical elements of the 

CEDS, which are set forth in § 303.7(b). 

We received one comment asking if 

there are any changes in the Interim 

Final Rule for Planning Investments to 

Indian Tribes. All Planning Investments, 

whether awarded to District 

Organizations, Indian Tribes, 

community development corporations, 

non-profit regional planning 

organizations or other Eligible 

Recipients (as listed in § 303.1), are 

governed by the requirements of part 

303. The Interim Final Rule made no 

specific changes to this part with 

respect to Planning Investments to 

Indian Tribes. Investments to Indian 

Tribes are subject to the same 

requirements as other Eligible 

Recipients and the discussion in this 

preamble applies equally to them. 

EDA received approximately 81 

identical comments expressing concern 

that the Interim Final Rule is ‘‘silent on 

the transition period and guidelines for 

thousands of local communities already 

covered by an existing CEDS, whether 

prepared by a District Organization, 

Indian [T]ribe or other [P]lanning 

[O]rganization.’’ EDA does not believe 

that administrative or instructional 

guidelines on how Planning 

Organizations will transition to comply 

with the requirements of parts 303 and 

304 belong in a set of regulations. This 

final rule does not amend the 

regulations at this time. However, EDA 

is cognizant that Recipients require a 

reasonable amount of time to comply 

with the new requirements. To that end, 

EDA is providing a one-year period for 

all Planning Organizations to 

demonstrate compliance with the 

requirements with parts 303 and 304. 

For all awards made in FY 2006, the 

Planning Organization must 

demonstrate compliance with all new 

requirements one year from the date of 

receiving EDA Investment Assistance. 

Part 304—Economic Development 

Districts 

Part 304 on Economic Development 

Districts (also referred to as a ‘‘District’’

or an ‘‘EDD’’ in § 300.3) sets forth the 

Regional eligibility requirements that 

must be satisfied in order for EDA to 

consider a District Organization’s 

request to designate a Region as an EDD, 

including submission of an EDAapproved CEDS, and the District 

Organization’s formation and 

organizational requirements. This part 

also contains provisions relating to 

termination and performance 

evaluations of District Organizations. As 

described in detail below, the December 

15, 2005 Rulemaking revised sections in 

this part in accordance with the 

Conference Report accompanying the 

2006 Appropriations Act. 

All provisions with respect to 

formation, organization and operation of 

a District Organization are contained in 

§ 304.2. EDA received over one 

thousand identical or nearly identical 

comments on the provision in 

§ 304.2(c)(2), which requires a District 

Organization’s governing body to 

include a majority of Private Sector 

Representatives (as defined in § 300.3). 

The majority of these comments 

‘‘adamantly opposed [ ] the new 

requirements that shift the governing 

bodies of [District Organizations] from 

the majority control of local government 

officials to unnamed private sector 

representatives.’’ Section 304.2(c)(2) 

never became effective on October 1, 

2005, as the September 30, 2005 and 

November 14, 2005 final rules delayed 

its effective date until January 31, 2006. 

As directed in the Conference Report 

accompanying the 2006 Appropriations 

Act, EDA revised § 304.2(c)(2) in the 

December 15, 2005 Rulemaking as 

follows: (i) A District Organization’s 

governing body must, unless otherwise 

prohibited by applicable State or local 

law, include at least one (1) Private 

Sector Representative, together with one 

(1) or more of the following: Executive 

directors of chambers of commerce, or 

representatives of institutions of postsecondary education, workforce 

development groups, or labor groups, all 

of which (including the Private Sector 

Representative) must comprise in the 

aggregate a minimum of 35% of the 

District Organization’s governing body; 

and (ii) if the District Organization 

demonstrates an inability to locate a 

Private Sector Representative to serve 

on its governing body following 

extensive due diligence (as determined 

by EDA), the Assistant Secretary may 

waive the Private Sector Representative 

requirement. The December 15, 2005 

Rulemaking also added a provision 

stating that the District Organization’s 

governing body will also have at least a 

simple majority of its membership who 

are elected officials and/or employees of 

a general purpose unit of local 

government who have been appointed 

to represent the government. 


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EDA received approximately 795 

identical or nearly identical comments 

on § 304.2(d), which provides that 

District Organizations may contract for 

services to accomplish approved scopes 

of work for Planning Investments. The 

majority of these comments stated, ‘‘We 

are specifically opposed to * * * 

minimizing local government 

participation in local planning and 

development activities.’’ As directed in 

the Conference Report accompanying 

the 2006 Appropriations Act, EDA 

revised § 304.2(d) in the December 15, 

2005 Rulemaking to specify that a 

District Organization will engage in the 

full range of economic development 

activities listed in its EDA-approved 

CEDS, which may include (i) 

coordinating and implementing 

economic development activities in the 

District; (ii) carrying out economic 

development research, planning, 

implementation and advisory functions 

identified in the CEDS; and (iii) 

coordinating the development and 

implementation of the CEDS with other 

local, State, Federal and private 

organizations. This subsection 

continues to give District Organizations 

the discretion to contract for services as 

necessary. 

EDA also received public comment on 

sections describing District termination, 

specifically subsections 304.3(b) and (c). 

EDA received approximately 520 

identical or nearly identical comments 

on § 304.3(b). These comments 

expressed concern ‘‘that the agency has 

added new criteria for the termination 

of District Organizations that are 

subjective and lack any appeals 

process.’’ We received approximately 87 

identical or nearly identical comments 

on § 304.3(c), which expressed concern 

‘‘that the agency may use the [Federal 

Funding Opportunity] process to change 

its policies, guidelines and performance 

standards without public comment.’’

Section 304.3(b)(2) provides that EDA 

may terminate a Region’s designation as 

an Economic Development District 

when EDA determines that the District 

Organization fails to execute its CEDS 

according to the development, 

implementation and other performance 

measures set forth in the CEDS. In 

accordance with the Conference Report 

accompanying the 2006 Appropriations 

Act, the December 15, 2005 Rulemaking 

added a new subsection (c) to § 304.3 to 

clarify that prior to terminating a 

District’s designation under subsection 

304.3(b)(2), EDA will consult with the 

District Organization and consider all 

facts and circumstances surrounding the 

District Organization’s operations. 

Section 304.3(c) also provides that EDA 

will not terminate a District’s 

designation based on circumstances 

beyond the control of the District 

Organization (e.g., natural disaster, 

plant closure, overall economic 

downturn, sudden and severe economic 

dislocation, or other situation). 

This final rule does not amend 

§ 304.3(d). We believe that the 

December 15, 2005 Rulemaking changes 

to § 304.3 safeguard District 

Organizations adequately with respect 

to District termination. EDA cannot use 

the Federal Funding Opportunity 

announcement process to change the 

regulatory standards for termination or 

modification of the designation of 

Economic Development Districts. 

Information with respect to the 

performance evaluations of District 

Organizations, formerly codified in part 

318 of EDA’s former regulations, is now 

incorporated into § 304.4. Pursuant to 

PWEDA, EDA will evaluate each District 

Organization within three (3) years after 

the initial Investment award and at least 

once every three (3) years thereafter, so 

long as the District Organization 

continues to receive Investment 

Assistance. On § 304.4(a), we received 

approximately 415 identical comments 

stating that ‘‘most of the requirements 

for grantee performance measurements 

are very vague and open to varying 

agency interpretations among the 

different regional offices.’’ We do not 

believe that the provisions of § 304.4(a) 

are vague. In fact, unlike EDA’s former 

regulations, the performance evaluation 

provisions of § 304.4(a) contain specific 

requirements for Economic 

Development Districts, such as the 

continuation of Regional eligibility of 

the District, the management of the 

District Organization, and the 

implementation of its CEDS. EDA’s 

regional offices are directed to interpret 

and apply EDA’s regulations 

consistently and uniformly across all 

regions in the United States. For these 

reasons, this final rule does not amend 

§ 304.4(a). 

Last, EDA received four comments 

expressing ‘‘concern with the 

elimination of up to 10% additional 

assistance if a project is located within 

a designated Economic Development 

District.’’ Because former section 403 of 

PWEDA was eliminated by the 2004 

Act, EDA removed from its regulations 

the ten (10) percent EDA ‘‘bonus’’

funding for certain Projects located in 

Economic Development Districts. 

Because EDA must implement its 

statutory mandate of PWEDA, EDA is 

unable to reinstate the ten (10) percent 

bonus. 

Part 305—Public Works and Economic 

Development Investments 

Part 305 describes general information 

about the scope of EDA’s Public Works 

program, award and application 

requirements, and provisions for EDA’s 

and Recipients’ duties. EDA received no 

public comments on this part. Section 

305.1 provides information on the 

purpose and scope of Public Works and 

Economic Development Investments. 

The criteria section (§ 305.2) specifies 

the scope of activities eligible for 

consideration of a Public Works 

Investment in subsection (a), and sets 

forth a list of determinations in 

subsection (b) that EDA must reach in 

order to award a Public Works 

Investment. 

The application requirements for 

Public Works Investments are set forth 

in § 305.3. The section on Public Works 

Projects for design and engineering 

work was moved from subpart B and 

placed as § 305.4 under subpart A. This 

section includes a provision to ensure 

awareness that EDA’s funding of a 

Project for design and engineering work 

does not in any way commit EDA to 

fund construction of the Project. 

The first section under subpart B is 

§ 305.5, titled Project administration by 

District Organization. These provisions 

are included in this subpart because the 

provisions are applicable to 

construction projects only. Section 

305.6 combines two former sections 

titled Construction Management 

services and Design/Build method of 

construction (§§ 305.10 and 305.11 of 

EDA’s former regulations) and addresses 

and accounts for the majority of Public 

Works Investments that lend themselves 

to the traditional design/build method 

of construction. However, Recipients 

may employ other construction 

methods, too. This final rule amends the 

second sentence of § 305.6(a) by 

replacing the phrase ‘‘design-build’’

with ‘‘design/bid/build.’’

Similar to the provisions in § 305.6, 

§ 305.7 includes information that the 

Recipient must submit to EDA to justify 

the use of ‘‘in-house forces.’’ Section 

305.8 provides that Recipients of EDA 

construction awards must obtain prior 

approval for the use of furnished 

equipment and materials. Requests must 

show that costs claimed for furnished 

equipment and materials are 

competitive with local market costs for 

similar equipment and materials. 

Section 305.9 contains specific 

information that the Recipient must 

provide to EDA for approval of any 

Project that necessitates phasing, 

including a description of elements to 

be completed in each phase and 


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detailed construction cost estimates for 

each phase. The last five (5) sections in 

subpart B, §§ 305.10 (Bid underrun), 

305.11 (Contract awards; early 

construction start), 305.12 (Project sign), 

305.13 (Contract change orders) and 

305.14 (Occupancy prior to completion), 

contain the same substance as found in 

EDA’s former regulations. However, 

EDA rewrote these sections in the 

Interim Final Rule to eliminate 

ambiguity or extraneous provisions. 

Except for the revision made in 

§ 305.6(a) stated above, this final rule 

does not amend part 305 of the Interim 

Final Rule. 

Part 306—Training, Research and 

Technical Assistance Investments 

Part 306 was primarily reorganized, 

shortened and rewritten in the Interim 

Final Rule for increased understanding 

and inclusiveness of all pertinent 

information. Section 306.1(a), dealing 

with the scope of Local and National 

Technical Assistance Investments, 

captures diverse purposes for such 

Investments. Section 306.2, titled Award 

requirements, is the combination of 

§§ 307.2 and 307.10 of EDA’s former 

regulations. Similarly, the content of 

§§ 307.3 and 307.11 in EDA’s former 

regulations was merged into § 306.3 and 

re-titled Application requirements. 

Section 306.3(c) specifically crossreferences § 301.4(b)(4), which sets forth 

the governing provisions for 

determining applicable Investment 

Rates for Projects under part 306. A 

cross-reference to § 301.4(b) is made in 

applicable sections of all parts relating 

to specific EDA programs (i.e., parts 

303–307). 

EDA received approximately seven 

comments on § 306.3(c) which stated 

that the provision is ‘‘much too 

demanding in terms of local match 

required.’’ Section 301.4(b)(4) ties the 

maximum allowable Investment Rate for 

Local and National Technical 

Assistance Projects to that otherwise 

applicable to the Region in which the 

Project will be located. Section 

301.4(b)(4) also authorizes a maximum 

Investment Rate of up to a one hundred 

(100) percent for Projects of a national 

scope under 13 CFR part 306 and for all 

other projects under 13 CFR part 306, in 

appropriate circumstances. We believe 

the maximum allowable Investment 

Rates for Local and National Technical 

Assistance Investments are fair and will 

preserve the Local Share requirement to 

make certain Recipients commit their 

own funds to help ensure the success of 

the Projects. 

In the Interim Final Rule, the title of 

subpart B was changed from University 

Center Program to University Center 

Economic Development Program. To 

mirror the organization and sequence of 

§§ 306.2 and 306.3 in subpart A, 

§§ 306.5 and 306.6 are named Award 

requirements and Application 

requirements, respectively. Section 

306.5 states that EDA provides 

Investment Assistance to University 

Center Projects based on the selection 

criteria in part 301, the competitive 

selection process outlined in the 

applicable FFO, and the extent to which 

the Eligible Applicant demonstrates 

other more specific, related criteria. 

Section 306.6 sets forth application 

requirements for University Center 

Projects. Section 306.6(c) crossreferences § 301.4(b)(4) for information 

regarding the applicable Investment 

Rate for University Center Projects. EDA 

received approximately fourteen 

comments on § 306.6(c), each that stated 

‘‘we are very troubled by the proposal 

to change the match requirements on 

the EDA [U]niversity [C]enter grant[s] 

and strongly oppose such a move.’’

Section 206 of PWEDA (42 U.S.C. 3146) 

requires EDA to consider the ‘‘relative 

needs’’ of eligible areas. As noted above, 

we believe § 301.4(b) appropriately 

takes ‘‘relative needs’’ into account for 

purposes of determining the maximum 

allowable Investment Rates and the 

Local Share requirements for EDA 

Investments. Accordingly, this final rule 

does not amend § 306.6(c). 

The University Center Economic 

Development Program establishes a 

three-year competitive cycle in which 

performance evaluations occurring 

within three (3) years after the initial 

Investment award will determine if a 

University Center may qualify to 

compete again for Investment 

Assistance. Consistent with section 

506(d)(2) of PWEDA (42 U.S.C. 3196), 

§ 306.7 contains an additional 

performance evaluation standard by 

which University Centers will be 

evaluated. At a minimum, University 

Centers will be evaluated specifically 

with regard to their contributions to 

providing technical assistance, 

conducting applied research, meeting 

program performance objectives and 

disseminating Project results in 

accordance with the scope of work 

funded during the evaluation period. 

This final rule adopts part 306 of the 

Interim Final Rule in its entirety. 

Part 307—Economic Adjustment 

Assistance Investments 

EDA extensively considered and 

examined part 308 of EDA’s former 

regulations in order to draft part 307 of 

the Interim Final Rule. This part was 

greatly improved by making effective 

use of defined terms in subpart A 

(covering Economic Adjustment 

Assistance Investments) and in subpart 

B (covering special requirements for 

RLF Grants). EDA did not receive any 

public comments on subpart A of part 

307, covering §§ 307.1 through 307.6. 

This final rule amends §§ 307.1, 307.2 

and 307.4 as described below. 

To ensure conformity between the 

titles of §§ 307.1 and 307.2 and their 

respective contents, this final rule 

changes the title of § 307.1 to Purpose 

and the title of § 307.2 to Criteria for 

Economic Adjustment Assistance 

Investments. For improved clarity, we 

also move § 307.1(b) to § 307.2 and 

delete § 307.2(b) in its entirety because 

an identical statement is already in 

§ 307.4(d). This final rule revises 

§ 307.4(d) to read as ‘‘Funding priority 

considerations for Economic 

Adjustment Assistance may be set forth 

in an FFO.’’

In drafting the Interim Final Rule, 

EDA revised subpart A to follow 

PWEDA and read more concisely. For 

example, in § 307.3 (titled Use of 

Economic Adjustment Assistance 

Investments), EDA introduced the new 

defined terms ‘‘Strategy Grant,’’

referring to Economic Adjustment 

Assistance Investments that help 

develop CEDS to alleviate long-term 

economic deterioration or a sudden and 

severe economic dislocation, and 

‘‘Implementation Grant,’’ defined as an 

Economic Adjustment Assistance 

Investment used to fund a Project 

implementing a CEDS. Section 308.4 in 

EDA’s former regulations, titled 

Selection and evaluation factors, was 

renamed Award requirements in § 307.4, 

parallel with similar provisions in other 

program parts, and reorganized and subtitled for clarity. 

EDA redrafted in the Interim Final 

Rule § 307.6 to emphasize and crossreference relevant parts or subparts in 

the chapter with respect to Strategy 

Grants and Implementation Grants. For 

instance, Implementation Grants 

involving construction must meet the 

requirements for Public Works 

Investments, whereas Implementation 

Grants not involving construction must 

follow the requirements for Local and 

National Technical Assistance 

Investments. Accordingly, the Interim 

Final Rule references parts 303, 305 and 

306 in § 307.6 for additional 

requirements that Strategy Grants and 

Implementation Grants, as appropriate, 

must fulfill (in addition to the postapproval stipulations set forth in 

§ 302.18). 

Except for an amendment made to 

§ 307.9 as explained below, this final 

rule does not substantively amend 

subpart B of part 307. However, we have 


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56666 Federal Register / Vol. 71, No. 187 / Wednesday, September 27, 2006 / Rules and Regulations 

re-ordered some of the sections in 

subpart B to logically separate preapproval actions from post-approval 

actions. The following discussion 

summarizes the provisions of this 

subpart. The first section, § 307.7, states 

that subpart B sets forth the 

requirements applicable to Economic 

Adjustment Assistance Grants used to 

capitalize or recapitalize RLFs. To 

ensure accuracy and completeness in 

this subpart, EDA rewrote in the Interim 

Final Rule the defined terms in § 307.8, 

which relate to RLF Grants. EDA also 

introduced new defined terms, such as 

‘‘Exempt Security,’’ ‘‘Sale,’’ ‘‘SEC,’’

‘‘Security’’ and ‘‘RLF Third Party,’’ in 

large part to interpret the provisions of 

section 209(d)(2) and (4) of PWEDA (42 

U.S.C. 3149). 

The requirements for RLF Plans are 

set forth in § 307.9, which states that 

EDA will evaluate an RLF Plan based on 

its ability to ‘‘demonstrate an adequate 

understanding of commercial loan 

portfolio management procedures, 

including loan processing, 

underwriting, closing, disbursements, 

collections, monitoring, and 

foreclosures’’ (see § 307.9(b)(3)). We 

received two comments opposing the 

provision in § 307.9 that requires the 

RLF Plan be submitted to and approved 

by EDA and passed by resolution of the 

RLF Recipient’s governing board prior 

to initial disbursement of EDA funds. 

The commenters indicated that from a 

practical standpoint, it may not be 

possible for a State or large city to pass 

a resolution accepting an RLF Plan; 

however, a resolution requirement may 

be more reasonable for a non-profit 

organization. In response to these 

comments and in order to maintain 

necessary flexibility in EDA’s grantmaking processes and requirements, this 

final rule revises the second sentence in 

§ 307.9 to require that the Plan be 

submitted to and approved by EDA. 

EDA will require a resolution by the 

RLF Recipient’s governing board on a 

case-by-case basis. 

This final rule moves § 307.16, titled 

Disbursement of funds to Revolving 

Loan Funds, to § 307.11 because it 

describes certain pre-approval 

requirements that must be satisfied prior 

to any disbursement of EDA funds (e.g., 

evidence of fidelity bond coverage; 

establishment of an EDA funds 

account). This section was revised and 

reorganized in the Interim Final Rule 

from § 308.16 of EDA’s former 

regulations. Section 307.12 makes 

explicit the general rule that RLF 

Income must be placed into the RLF 

Capital base for the purpose of making 

loans or paying for eligible and 

reasonable administrative costs 

associated with the RLF’s operations. 

Section 307.12(c) provides a priority of 

payment schedule for proceeds on a 

defaulted RLF loan that is not subject to 

liquidation pursuant to § 307.20. 

The next three sections, §§ 307.13, 

307.14 and 307.15 (titled Records and 

retention; Revolving Loan Fund semiannual and annual reports; and Prudent 

management of Revolving Loan Funds), 

are substantively the same as §§ 308.13, 

308.14 and 308.15 of EDA’s former 

regulations. The main focus of the 

revision to these sections, as seen in the 

Interim Final Rule, was to incorporate 

defined terms to improve the 

explanation of the specific 

documentation, accounting and 

reporting requirements. Additionally, 

the conflicts of interest provisions in 

§ 308.15(e) in EDA’s former regulations 

were moved to § 302.17(c) to improve 

organization and referencing facility. 

This final rule moves § 307.17 (titled 

Effective utilization of Revolving Loan 

Funds) to § 307.16. This section was 

slightly reworded in the Interim Final 

Rule from what appeared in § 308.17 of 

EDA’s former regulations. Those 

revisions largely incorporated the use of 

defined terms (e.g., Closed Loan; RLF 

Capital). This final rule also moves 

§ 307.18 (titled Uses of capital) to 

§ 307.17. This section sets forth specific 

restrictions on the use of RLF Capital. 

Section 307.17(d) clarifies that In-Kind 

Contributions may satisfy Matching 

Share requirements when specifically 

authorized in the RLF Grant and may be 

used to provide technical assistance to 

borrowers or for eligible RLF 

administrative costs. 

This final rule moves § 307.11, which 

addresses the addition of lending areas 

and the merger of RLFs, to § 307.18. In 

this section, EDA (i) correlated the 

substance of the section to applicable 

provisions in section 209 of PWEDA (42 

U.S.C. 3149), (ii) eliminated information 

no longer applicable due to the passage 

of the 2004 Act, and (iii) explained and 

expanded important concepts in an 

orderly, coherent manner with the use 

of defined terms. In the Interim Final 

Rule, EDA changed the title of the 

section from Lending areas and 

modification of lending areas to 

Addition of lending areas; merger of 

RLFs, to highlight the increased 

flexibility that PWEDA affords to RLF 

Recipients for consolidating and 

merging RLF Grants. Section 

307.18(a)(1) sets forth the preconditions 

that must be met in order for EDA to 

approve the creation of a ‘‘New Lending 

Area.’’ Similarly, § 307.18(b) sets forth 

the preconditions for EDA to approve a 

single RLF Recipient’s or multiple RLF 

Recipients’ merger of RLFs. The 

requirements in subparagraphs (1) and 

(2) are substantively the same regarding 

single RLF Recipients and multiple RLF 

Recipients. Each must meet the 

requirements to obtain annual report 

status (set forth in § 307.14) and amend 

and consolidate the RLF Plans to 

account for the merger. Prior to EDA’s 

disbursement of additional funds to the 

RLF Recipient (or surviving RLF 

Recipient), EDA must determine a new 

Investment Rate for the New Lending 

Area. 

EDA drafted §§ 307.19 and 307.20 of 

the Interim Final Rule as new 

provisions to accomplish the 

authorization for EDA’s Assistant 

Secretary to ‘‘assign or transfer assets of 

a revolving loan fund to a third party for 

the purpose of liquidation’’ and ‘‘take 

such actions as are appropriate to enable 

revolving loan fund operators to sell or 

securitize loans’’ (see section 

209(d)(2)(B) and (C) of PWEDA (42 

U.S.C. 3149)). First, in any Sale or 

Securitization in which an RLF 

Recipient may participate, § 307.19 

requires compliance with the Securities 

Act of 1933, the Securities Exchange Act 

of 1934 and any rule or regulation made 

public by the Securities and Exchange 

Commission (see section 209(d)(4) of 

PWEDA (42 U.S.C. 3149)). The RLF 

Recipient must use all proceeds from 

any Sale or Securitization to make 

additional RLF loans. Second, § 307.20 

provides the terms that will govern any 

partial or full liquidation of an RLF 

Recipient’s RLF loans. In the case of an 

EDA-approved termination of an RLF 

Grant, EDA may assign or transfer assets 

of the RLF to an RLF Third Party for 

liquidation. 

Section 307.21 provides the process 

for termination of RLFs. Subsection 

307.21(b) provides a new authority that 

allows EDA to approve a request from 

an RLF Recipient to terminate an RLF 

Grant. The last section, § 307.22, was 

rephrased in the Interim Final Rule for 

clarity and completeness and covers the 

same material found at § 308.19 of 

EDA’s former regulations. 

EDA did not receive any specific 

comments on §§ 307.7 through 307.21 of 

subpart B. However, we received 

approximately 87 identical or nearly 

identical comments expressing general 

‘‘concern that RLF administrators are 

required to receive regular approval 

from EDA for a variety of activities and 

decisions.’’ Other comments stated, 

‘‘The EDA RLF program should not have 

additional constraining administrative 

oversight requirements imposed on it so 

as to interfere with the core mission of 

the program to provide capital and 

credit to regions and businesses not 

served by traditional lenders.’’ EDA 


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believes the new RLF provisions in 

subpart B are consistent with the Senate 

Report accompanying the 2004 Act, 

which calls for the Assistant Secretary 

to ‘‘promulgate regulations to improve 

the administration of [RLFs], 

consolidate [RLFs] at the grantee’s 

request and transfer RLF portfolio assets 

to third parties for liquidation.’’ S. Rep. 

No. 108–382, at 6 (2004). Specifically, 

the strengthened audit and reporting 

requirements do not alter the original 

intent and scope of the RLF program or 

impose new cost burdens on RLF 

Recipients. 

Part 308—Performance Incentives 

Part 308 incorporates new sections 

215 and 216 of PWEDA (42 U.S.C. 

3154a; 42 U.S.C. 3154b). EDA received 

no comments on this part, nor does this 

final rule amend this part. The 

discussion below summarizes the part 

308 provisions. 

For any construction Project awarded 

under parts 305 or 307 that is completed 

under projected cost pursuant to section 

211 of PWEDA (42 U.S.C. 3151), 

§ 308.1(a) provides that EDA may in its 

discretion allow the Recipient to use the 

excess funds to either increase the 

Investment Rate of the Project to the 

maximum percentage allowable under 

§ 301.4 for which the Project was 

eligible at the time of the Investment 

award, or further improve the Project 

consistent with its purpose. 

Additionally, section 215 of PWEDA 

(42 U.S.C. 3154a) authorizes the 

Assistant Secretary to make 

performance awards in connection with 

grants to Recipients for Public Works or 

Economic Adjustment Assistance 

Investments. Section 308.2(a) provides 

that, with respect to any such 

Investment, the Assistant Secretary may 

grant a performance award to the 

Recipient (on a discretionary basis) in 

an amount not to exceed ten (10) 

percent of the Project’s Investment 

award. As discussed in the Conference 

Report accompanying the 2006 

Appropriations Act, EDA revised 

§ 308.2(b) in the December 15, 2005 

Rulemaking to better adhere to section 

215 of PWEDA (42 U.S.C. 3154a). 

Specifically, EDA replaced the 

requirement that project performance be 

‘‘exceptional’’ with the ‘‘meet or 

exceeds’’ threshold in section 215(b)(2) 

of PWEDA (42 U.S.C. 3154a). 

Section 308.2(c) provides that a 

Recipient may receive a performance 

award no later than three (3) years 

following the Project’s closeout. 

Following section 215(e)–(f) of PWEDA 

(42 U.S.C. 3154a), § 308.2(d) provides 

that performance awards may fund up 

to one hundred (100) percent of the cost 

of an eligible Project or any other 

authorized activity under PWEDA, and 

for the purpose of meeting the nonFederal share requirement of PWEDA or 

any other statute, the performance 

award amount will be treated as nonFederal funds. Additionally, EDA will 

set forth in an applicable FFO the 

requirements, qualifications, guidelines 

and procedures for performance awards, 

with all performance awards being 

subject to the availability of funds (see 

§ 308.2(e)). 

With respect to planning performance 

awards, § 308.3 tracks the language of 

section 216 of PWEDA (42 U.S.C. 

3154b). Section 308.3 introduces that a 

Recipient may be eligible to receive a 

planning performance award in an 

amount not to exceed five (5) percent of 

the amount of the applicable 

Investment. As with performance 

awards made to Recipients of Public 

Works or Economic Adjustment 

Assistance Investments, the Assistant 

Secretary will make such awards on a 

discretionary basis. As set forth in 

§ 308.3(a), such awards are predicated 

on a finding that the Recipient actively 

participated in the economic 

development activities of the District 

and that the Project demonstrated 

exceptional fulfillment of one (1) or 

more components of the applicable 

CEDS. 

Part 309—Redistributions of Investment 

Assistance 

The provisions in part 309 of the 

Interim Final Rule are new and were not 

in EDA’s former regulations. EDA 

received no comments on this part. 

Except for a minor revision made to 

§ 309.1(a) as described below, this final 

rule does not amend this part. The 

discussion below summarizes part 309. 

In accordance with new section 217 of 

PWEDA (42 U.S.C. 3154c), information 

with respect to redistributions of 

Investment funds for Planning, Public 

Works, and Training, Research and 

Technical Assistance Investments is 

presented in § 309.1. Specifically, 

§ 309.1(a) provides that a Recipient 

under any program governed by parts 

303, 305 and 306 may directly expend 

the Investment Assistance, or, with 

prior EDA approval, redistribute such 

funds in the form of a subgrant to 

another Eligible Recipient that qualifies 

for EDA Investment Assistance under 

the same program part as the Recipient. 

All subgrants must be subject to the 

same terms and conditions applicable to 

the Recipient under the original 

Investment award. To improve sentence 

structure, this final rule changes the 

phrase ‘‘Except as provided by * * *.’’

to ‘‘Except as provided in * * *.’’ in the 

first sentence of § 309.1(a). Subsection 

309.1(b) stipulates that Investment 

Assistance received under parts 303 or 

305 may not be redistributed to a forprofit entity. 

Section 309.2 addresses 

redistributions under part 307 for 

Economic Adjustment Assistance 

Investments. This section reads 

similarly to § 309.1. However, a 

Recipient under part 307 may 

redistribute Investment funds to another 

Eligible Recipient in the form of a Grant 

or to a non-profit and private for-profit 

entity in the form of a loan (or loan 

guarantee) under subpart B of part 307. 

Part 310—Special Impact Areas 

Part 310 corresponds to new section 

214 of PWEDA (42 U.S.C. 3154), which 

allows the Assistant Secretary to waive 

the CEDS requirements of section 302 of 

PWEDA (42 U.S.C. 3162) for a Project 

that will fulfill a ‘‘pressing need’’ of the 

Region or prominently address or 

alleviate Regional underemployment or 

unemployment. EDA did not receive 

any public comments on part 310. EDA 

does not make any changes to this part. 

Section 310.1 generally tracks section 

214 of PWEDA (42 U.S.C. 3154), but 

makes clear that any waiver of the 

requirements of section 302 of PWEDA 

(42 U.S.C. 3162) applies only to an 

individual Project, not to all Projects 

located within the Region. 

Section 310.2(a) interprets the 

‘‘pressing need’’ language of the new 

PWEDA provision and reflects standard 

EDA policy priorities, based on, among 

other things, assistance to Indian Tribes, 

rural and severely distressed Regions, 

and the existence of a Special Need. 

Similarly, subsections 310.2 (b) and (c) 

set forth quantitative measures of 

excessive unemployment and as 

indicators of useful employment 

opportunities, such as the Project’s 

prospective job creation, commitment of 

financial investment by private entities, 

and application of innovative 

technology. 

Part 311—[Reserved] 

Part 312—[Reserved] 

Part 313—[Reserved] 

Part 314—Property 

Part 314 sets forth the rules governing 

the uses of and EDA’s interests in 

Property acquired, in whole or in part, 

or improved with EDA Investment 

Assistance. The changes made by the 

Interim Final Rule to the Real Property 

provisions in subpart B primarily reflect 

EDA policies regarding the increasing 

use of ‘‘public-private’’ partnerships to 

spur Regional economic development. 

EDA received no comments on this part. 


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The discussion below explains changes 

made to §§ 314.1, 314.4, 314.6, 314.7 

and 314.10 by this final rule and 

summarizes changes previously made 

by the Interim Final Rule to specific 

sections of part 314. 

In the Interim Final Rule, EDA revised 

defined terms from EDA’s former 

regulations and added new defined 

terms in § 314.1 for clarity and 

consistency. For example, the definition 

of ‘‘Adequate Consideration’’ includes 

the concept of ‘‘fair market value’’ (i.e., 

the purchase price agreed upon between 

a buyer and a seller acting in good faith, 

both having full knowledge of the 

material facts and circumstances 

surrounding the contemplated 

transaction). In comparison, EDA’s 

former regulations used a ‘‘fair and 

reasonable’’ determination to define 

Adequate Consideration. This final rule 

removes the defined terms 

‘‘Encumbrance’’ and ‘‘Encumber.’’

These terms were defined in § 314.1 as 

having the meaning ascribed to them in 

§ 314.6. Inasmuch as the title of § 314.6 

is Encumbrances, the reader will have 

no difficulty in finding and 

understanding EDA’s discussion of 

these terms. For improved accuracy and 

understanding, this final rule also 

amends the definition of ‘‘Estimated 

Useful Life’’ to make clear that this term 

refers to the time span over which EDA 

participates and realizes the economic 

development benefits of its Investment 

in a Project. 

Section 314.2(a) provides that (i) 

Property acquired or improved, in 

whole or in part, with Investment 

Assistance is held in trust by the 

Recipient for the benefit of the Project 

and (ii) EDA maintains an equitable 

reversionary interest in such Property 

for the Estimated Useful Life of the 

Project (defined as the ‘‘Federal 

Interest’’). Section 314.2(b) is the same 

as the provisions set forth in EDA’s 

former regulations and provides that 

when the Federal government is fully 

compensated for the Federal Share of 

Property acquired or improved, in 

whole or in part, with Investment 

Assistance, the Federal Interest is 

extinguished and the Federal 

government has no further interest in 

the Property. 

Section 314.3, titled Authorized use of 

Property, provides the circumstances in 

which Recipients may use Property 

acquired or improved, in whole or in 

part, with Investment Assistance. For 

example, § 314.3(d) allows EDA to 

approve the transfer of Property from a 

Recipient to a Successor Recipient (or 

between two Successor Recipients) and 

clarifies that the process necessary to 

effectuate a substitution of the Recipient 

(or Successor Recipient) involves 

transferring the Project Property 

between the parties. The provision in 

§ 314.3(f) was introduced in the Interim 

Final Rule and was not present in EDA’s 

former regulations. This provision 

authorizes EDA to approve, and a 

Recipient to undertake, an incidental 

use of Property that does not interfere 

with the scope or economic purpose of 

the Project. This incidental use is 

conditioned upon the Recipient’s 

compliance with applicable law and the 

terms and conditions of the Investment 

Assistance. 

Section 314.4(a) provides that, with 

certain exceptions, the Federal 

government must be compensated for 

the Federal Share whenever, during the 

Estimated Useful Life of the Project, any 

Property acquired or improved (in 

whole in part) with Investment 

Assistance is Disposed of, encumbered, 

or no longer used for the purpose of the 

Project. This final rule amends 

§ 314.4(a) by replacing the phrase 

‘‘Uniform Administrative Requirements 

for Grants at 15 CFR parts 14 and 24’’

with the phrase ‘‘requirements at 15 

CFR parts 14 or 24, as applicable.’’

Section 314.4(b) sets out additional 

Unauthorized Uses of Property prior to 

the release of EDA’s interest. Section 

314.4(c) generally tracks § 314.4(b) of 

EDA’s former regulations and sets forth 

the remedies available to EDA to recover 

the Federal Share in the event of an 

Unauthorized Use. This final rule adds 

a new sentence to subsection (c) to 

restore the language that previously was 

set out in § 314.5(d) of EDA’s former 

regulations, which specifies that 

payment of the Federal Share in accord 

with this section extinguishes the 

Federal Interest in the Property. Section 

314.5(d) of EDA’s former regulations 

was moved to § 314.2(b) in the Interim 

Final Rule, which covers Federal 

Interest provisions. We are adding a 

similar statement to § 314.4(c) 

concerning Unauthorized Use of 

Property to clarify that once the Federal 

Share is repaid, EDA has no continuing 

interest in the ownership, use or 

Disposition of the Property. 

Section 314.5 defines ‘‘Federal Share’’

and is substantively the same as 

§ 314.5(a) of EDA’s former regulations. 

Similarly, § 314.6 is substantively the 

same as § 314.6 of EDA’s former 

regulations (although the provisions are 

reordered to present the general rule 

and exceptions in a more logical 

sequence) and, with certain exceptions, 

prohibits the encumbrance of Recipientowned Property. To improve clarity, 

this final rule revises the first sentence 

in § 314.6(a) by eliminating the phrase 

‘‘(collectively, an ‘‘Encumbrance’’ or to 

‘‘Encumber’’).’’ Further, this final rule 

adds the phrase ‘‘, except to secure a 

grant or loan made by a Federal Agency 

or State agency or other public body 

participating in the same Project’’ after 

the words ‘‘or otherwise encumbered’’

in the first sentence of § 314.6(a). This 

revision aims to simplify program 

administration by allowing such 

encumbrances to remain on EDAassisted Properties without requiring the 

administrative step of requesting and 

obtaining specific EDA approval. As a 

matter of policy, EDA automatically 

approves such requests and, therefore, 

the extra step is unnecessary. Section 

314.6(b)(1) sets out a similar provision 

that authorized EDA to approve an 

encumbrance on Project Property when 

the Recipient has encumbered the 

Property at the behest of another Federal 

Agency. This final rule removes 

§ 314.6(b)(1) in its entirety and renumbers paragraphs (b)(2), (b)(3) and 

(b)(4) as paragraphs (b)(1), (b)(2) and 

(b)(3), respectively. 

Section 314.7(a) sets forth the 

requirement that a Recipient must hold 

title to the Real Property required for a 

Project at the time Investment 

Assistance is awarded and must 

maintain title at all times during the 

Estimated Useful Life of the Project (the 

‘‘General Rule’’). Section 314.7(c) sets 

forth the exceptions to the General Rule. 

For example, § 314.7(c)(1) addresses the 

situation where Investment Assistance 

will be used to purchase Real Property 

required for a Project. Under 

§ 314.7(c)(1), EDA may determine that 

the Recipient satisfies the title 

ownership requirement of § 314.7(a) if 

the Recipient has entered into a Real 

Property purchase agreement and 

provides reasonable assurances that it 

will obtain fee title for the Real Property 

needed for a Project prior to or 

concurrent with the initial disbursement 

of Investment Assistance. 

Subsections 314.7(c)(5) and (6) 

address situations where the EDAapproved purpose of the Project is to 

construct facilities benefiting Real 

Property owned by the Recipient 

(§ 314.7(c)(5)) or privately-owned Real 

Property (§ 314.7(c)(6)), where the 

benefited Real Property will ultimately 

be sold or leased to private parties. 

These provisions replace § 314.7(c)(3) 

and (4) in EDA’s former regulations and 

generally apply to all types of Real 

Property, including but not limited to 

industrial and commercial parks. For 

improved sentence structure and 

accuracy, this final rule reformats 

subsections (c)(5)(i)(D) and (c)(6)(i)(D) of 

§ 314.7 to clarify that the sale or lease 

of any portion of a Project during its 

Estimated Useful Life must be for 


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Adequate Consideration, and the terms 

and conditions of the Investment 

Assistance and the purpose(s) of the 

Project must continue to be fulfilled 

after the sale or lease. EDA may waive 

these requirements under the specific 

circumstance provided in both 

subsections, namely, after the ten (10) 

year anniversary of the date upon which 

the Investment Assistance was awarded. 

This final rule also removes the 

references in §§ 314.7(c)(5)(i)(E) and 

314.7(c)(6)(i)(E) to the number of times 

a Project is transferred, because EDA 

believes that the five (5) year 

anniversary periods (similar to the ten 

(10) year anniversary period noted 

above) are more accurate measures of 

whether a Project is continuing to serve 

the purpose(s) for which the underlying 

EDA Investment was made. 

Section 314.8 is substantively the 

same as § 314.8 of EDA’s former 

regulations and generally provides that 

for all Projects involving the acquisition, 

construction or improvement of a 

building, the Recipient must execute a 

lien, covenant or other statement of 

EDA’s interest in such Real Property. 

Any lien, covenant or statement of 

EDA’s interest must be perfected and 

recorded (in accordance with local law) 

in the jurisdiction in which the Real 

Property is located. Section 314.9 is 

substantively the same as § 314.9 of 

EDA’s former regulations and provides 

that for all Projects involving the 

acquisition or improvement of 

significant items of Personal Property, 

the Recipient must execute a security 

interest or other statement of EDA’s 

interest in such Personal Property. Any 

security interest or statement must be 

perfected and recorded in accordance 

with applicable law and with 

continuances re-filed, as appropriate. 

Subsections 314.10(a) through (c) are 

substantively the same as subsections 

314.11(a) through (c) of EDA’s former 

regulations. This final rule eliminates 

the phrase ‘‘, in whole or in part,’’ from 

§ 314.10(a). In addition, in 

§ 314.10(c)(1), we replace the phrase 

‘‘paragraph (a)’’ with ‘‘paragraphs (a) or 

(b),’’ for conformance with § 314.11(c)(1) 

of EDA’s former regulations. 

The Interim Final Rule added a new 

section to EDA’s regulations at 

§ 314.10(d). This section sets forth the 

procedures for requesting a release of 

EDA’s Real Property or tangible 

Personal Property interest pursuant to 

section 601(d)(2) of PWEDA (42 U.S.C. 

3211) and § 314.10. This final rule 

revises the second sentence of 

§ 314.10(d)(1) to read as follows: ‘‘In 

addition to the restrictions set forth in 

paragraph (c) of this section, the release 

may be conditioned upon some activity 

of the Recipient intended to be pursued 

as a consequence of the release.’’ EDA 

makes these revisions to ensure clarity 

and to ensure consistency among 

different provisions of § 314.10. 

Part 315—Trade Adjustment Assistance 

for Firms 

The Interim Final Rule substantially 

revised the Trade Adjustment 

Assistance for Firms (‘‘TAA’’) program 

provisions of EDA’s former regulations. 

In the Interim Final Rule, part 315 was 

reorganized and simplified primarily by 

expanding the use of defined terms and 

by adding a new subpart D on 

Adjustment Proposals. This final rule 

adopts part 315 without substantive 

change except for amendments made to 

§§ 315.5, 315.6, 315.7, 315.8 and 315.16. 

Among the new definitions in § 315.2, 

the defined terms ‘‘Increase in Imports’’

and ‘‘Contributed Importantly’’ describe 

two (2) of the most important concepts 

of the TAA program. In order for EDA 

to determine that a petitioning Firm 

demonstrates injury, the petitioning 

Firm must show that An Increase in 

Imports Contributed Importantly to its 

(i) decline in sales or production and (ii) 

loss of employment. EDA received two 

(2) comments suggesting that the 

defined term ‘‘Increase in Imports’’ is an 

‘‘outdated condition required to qualify 

domestic manufacturers for needed 

TAA.’’ The commenters stated that 

‘‘when significant market-share has 

been captured by imports, there may not 

be an increase in imports because of 

general economic conditions whereby 

the demand for a particular product may 

decline.’’ This final rule does not amend 

the definition of ‘‘Increase in Imports’’

because the definition tracks section 

251(c) of the Trade Act (19 U.S.C. 2341) 

precisely and is intended to provide for 

more consistent application in injury 

determinations. 

The new term ‘‘Decreased Absolutely’’

imposes a five (5) percent minimum 

injury threshold requirement in the 

measurement of a Firm’s decline in 

sales or production. EDA received 

approximately seven comments on this 

defined term which stated that the five 

(5) percent minimum injury threshold 

requirement will deny access to further 

qualified Firms, making it more difficult 

for them to qualify for the TAA 

program. This final rule does not amend 

the definition of ‘‘Decreased 

Absolutely.’’ EDA has imposed this new 

threshold to (i) eliminate certification of 

Firms whose decline in sales or 

production is de minimis and, therefore, 

less certain to be attributable to an 

Increase in Imports, and (ii) help ensure 

that limited TAA program funds are 

provided to the most merit-worthy 

Firms facing difficult adjustment 

problems as a result of an Increase in 

Imports. Similarly, the definitions of 

‘‘Predecessor’’ and ‘‘Successor’’ Firms 

set forth in the Interim Final Rule 

provide guidance for the circumstance 

where a petitioning Firm relies on the 

economic injury suffered by a corporate 

predecessor. These defined terms make 

clear that the Successor must have been 

in business less than two (2) years and 

must have purchased substantially all of 

the assets of the Predecessor. 

Section 315.5 consolidates into one 

section the scope of operations, 

selection, evaluation and award 

requirements of the Trade Adjustment 

Assistance Centers (‘‘TAACs’’), the nonprofit and university-affiliated 

organizations that administer the TAA 

program nationwide through 

Cooperative Agreements with EDA. For 

consistency throughout the chapter, we 

amend the last sentence in § 315.5(a)(1) 

by replacing the phrase ‘‘annual FFO’’

with ‘‘applicable FFO.’’ For improved 

understanding and formatting, this final 

rule also deletes the lead-in phrase in 

§ 315.5(b) and replaces the semicolon in 

§ 315.5(b)(1) with a period. 

Additionally, we revise § 315.5(b)(2) by 

making clear that EDA may invite new 

TAAC proposals through an FFO. 

Section 315.6 consolidates into one 

section the eligibility, evaluation and 

award requirements for Firms seeking 

Adjustment Assistance under the TAA 

program. This final rule amends the title 

of § 315.6 to read as Firm eligibility for 

Adjustment Assistance, to more 

accurately reflect the section’s contents, 

and removes the subtitles in paragraphs 

(a) through (c). Further, for clarity and 

conciseness, we replace the first 

sentence in § 315.6(a)(3) with the 

sentence in § 315.6(a)(4), and marginally 

revise the second sentence in 

§ 315.6(a)(3). 

Section 315.7 outlines the 

requirements for injury determinations 

based on a twelve-month (12) decline 

(§ 315.7(b)(1)), an interim sales or 

production decline (§ 315.7(b)(2)), or an 

interim employment decline 

(§ 315.7(b)(3)). This section makes clear 

that in order to be certified under any 

of these circumstances, a Firm must 

meet all of the requirements of the 

applicable subsection. We received 

approximately eight comments on 

§ 315.7(b), three of which expressed 

opposition to the applicable twelvemonth (12) and six-month (6) periods of 

comparison outlined in §§ 315.7(b)(1) 

and 315.7(b)(3), and five of which 

expressed that the ‘‘change to require 

six-month interim periods from the 

currently quarterly interim periods [in 

§ 315.7(b)(2)] will limit the number of 


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potentially eligible [F]irms to enter the 

program.’’ EDA increased the injury 

periods for an interim sales or 

production decline and an interim 

employment decline to help ensure that 

limited TAA program funds are 

provided to the most merit-worthy 

Firms facing difficult adjustment 

problems as a result of an Increase in 

Imports into the United States. Section 

315.7 as set forth in the Interim Final 

Rule adds consistency and integrity to 

these injury determination requirements 

by ensuring that (i) injury has occurred 

recently and (ii) injury is not due to 

seasonal fluctuations in sales, 

production or employment. This final 

rule amends the second sentence in 

§ 315.7(a) by deleting the phrase ‘‘all of’’

and replacing the word ‘‘requirements’’

with ‘‘circumstances.’’

Section 315.8, titled Processing 

petitions for certification, generally 

tracks § 315.10 of EDA’s former 

regulations. This final rule amends this 

section to include a reference to Form 

ED–840P, which a petitioning Firm 

must complete and submit to EDA in 

order to apply for Adjustment 

Assistance. This final rule also replaces 

the lead-in sentence of § 315.8(b) to 

include the new title of the form. 

Additionally, in response to comments 

received on this regulation, § 315.8(b)(5) 

is revised to add the requirement that a 

petitioning Firm also must submit to 

EDA one (1) copy of a complete 

auditor’s certified financial report for 

the entire period covering the petition, 

or if not available, one (1) copy of the 

complete profit and loss statements, 

balance sheets and supporting 

statements prepared by the Firm’s 

accountants for the entire period 

covered by the petition. Public 

companies should submit copies of their 

most recent Form 10–K annual reports 

(or Form 10–Q quarterly reports, as 

appropriate) filed with the U.S. 

Securities and Exchange Commission 

for the entire period covered by the 

petition. This final rule also eliminates 

§ 315.8(b)(6) and re-designates 

subsections (b)(7) and (b)(8) as (b)(6) 

and (b)(7), respectively. As requested, 

EDA is eliminating the requirement that 

Firms submit Federal income tax 

returns and State employment tax 

returns in order to reduce respondent 

burden in completing and submitting 

petitions (on Form ED–840P). 

Although the substantive provisions 

in § 315.8 were not modified in the 

Interim Final Rule, one commenter 

raised a concern on the process 

prescribed in paragraphs (c) (relating to 

formal EDA acceptance of a petition for 

certification) and (g) (relating to the time 

of the determination after acceptance of 

a petition). The commenter contended 

that these paragraphs do not comport 

with the underlying statutory provision 

that requires EDA to make a 

determination about certification not 

later than 60 days after the date the 

petition is ‘‘filed’’ (see 19 U.S.C. 

§ 2341(d)). EDA believes the 

requirements of paragraphs (c) and (g) of 

this section (discussed below) are fully 

consistent with the statute. Moreover, 

these provisions have been in the EDA 

regulations without substantive change 

since 1995 (although the Interim Final 

Rule provides that EDA will send notice 

of a technically deficient petition to the 

sponsoring TAAC instead of to the 

petitioning firm). This final rule does 

not change either paragraph (c) or (g) of 

§ 315.8 from the version published in 

the Interim Final Rule. 

In evaluating petitions for 

determinations of certification under 

paragraphs (c) and (g) of § 315.8 of the 

Interim Final Rule, EDA employs a twostage process. First, EDA conducts a 

technical review based on the 

requirements set forth in paragraph (b) 

of § 315.8 to determine if a petition has 

been properly filed and can be accepted 

for investigation. Second, EDA 

examines the ‘‘accepted’’ petition to 

determine whether the firm is eligible 

for program benefits based on the claims 

set forth in the petition. EDA works 

closely with the TAACs upon receipt of 

a petition and during the early stages of 

the petition evaluation process to ensure 

that eligible firms are not denied access 

to the TAA program due to technical 

defects in their petitions. The 

submission of accurate petitions also 

decreases the time it takes EDA to 

certify firm eligibility. EDA intends to 

work more closely with the TAACs to 

ensure that petitions submitted by firms 

through the TAACs meet technical 

petition filing requirements. For its part, 

EDA will endeavor to process accepted 

petitions in an expeditious manner and 

well in advance of the 60-day review 

period required by the statute and by 

paragraph (g) of § 315.8 of the Interim 

Final Rule. 

The commenter also recommended 

that EDA drop the new regulations and 

look for ways to streamline the 

certification process. For the reasons 

noted above, EDA believes it has 

streamlined significant aspects of the 

certification process in response to 

comments. Moreover, in addition to 

these new regulations, EDA has placed 

into service a new petition for 

certification that streamlines the 

petition process. This final rule includes 

those provisions necessary to enable 

EDA to demonstrate it is administering 

the Trade Adjustment Assistance 

Program in a manner consistent with the 

requirements of law. 

Section 315.9, titled Hearings, and 

§ 315.11, titled Appeals, final 

determinations and termination of 

certification, divide § 315.11 of EDA’s 

former regulations to address separately 

these distinct topics. As set forth in the 

Interim Final Rule, subpart C, titled 

Protective Provisions, contains standard 

provisions consistent with the Trade 

Act and EDA policy on recordkeeping 

(§ 315.12), audit and examination 

(§ 315.13), certifications (§ 315.14) and 

conflicts of interest (§ 315.15). 

Subpart D, titled Adjustment 

Proposals, presents provisions reflecting 

long-standing practices of EDA and the 

TAACs in evaluating Adjustment 

Proposals. This final rule changes the 

title of § 315.16 to Adjustment Proposal 

Requirements and removes the word 

‘‘process’’ in the lead-in statement. To 

clarify the appropriate uses of TAA 

program funds, this final rule also adds 

a new subsection (d) to § 315.16 to read 

as follows: ‘‘The Adjustment Assistance 

identified in the Adjustment Proposal 

must consist of specialized consulting 

services designed to assist the Firm in 

becoming more competitive in the 

global marketplace. For this purpose, 

Adjustment Assistance generally 

consists of knowledge-based services 

such as market penetration studies, 

customized business improvements, and 

designs for new products. Adjustment 

Assistance does not include 

expenditures for capital improvements 

or for the purchase of business 

machinery or supplies.’’

Finally, subpart E, titled Assistance to 

Industries, is effectively unchanged 

from EDA’s former regulations, tracking 

the current statutory provisions of the 

Trade Act. 

Classification 

Prior notice and opportunity for 

public comment are not required for 

rules concerning public property, loans, 

grants, benefits, and contracts (5 U.S.C. 

553(a)(2)). Because prior notice and an 

opportunity for public comment are not 

required pursuant to 5 U.S.C. 553, or 

any other law, the analytical 

requirements of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) are 

inapplicable. Therefore, a regulatory 

flexibility analysis has not been 

prepared. 

Executive Order No. 12866 

It has been determined that this final 

rule is significant for purposes of 

Executive Order 12866. 


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Congressional Review Act 

This final rule is not major under the 

Congressional Review Act (5 U.S.C. 801 

et seq.) 

Executive Order No. 13132 

Executive Order 13132 requires 

agencies to develop an accountable 

process to ensure ‘‘meaningful and 

timely input by State and local officials 

in the development of regulatory 

policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

Executive Order 13132 to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ It has 

been determined that this final rule does 

not contain policies that have 

federalism implications. 

Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (‘‘PRA’’) 

requires that a Federal agency consider 

the impact of paperwork and other 

information collection burdens imposed 

on the public and, under the provisions 

of PRA section 3507(d), obtain approval 

from OMB for each collection of 

information it conducts, sponsors, or 

requires through regulations. 

Notwithstanding any other provision of 

law, no person is required to respond to, 

nor shall any person be subject to a 

penalty for failure to comply with a 

collection of information subject to the 

PRA unless that collection displays a 

currently valid OMB Control Number. 

The following table provides a 

complete list of the collections of 

information (and corresponding OMB 

Control Numbers) set forth in this final 

rule. These collections of information 

are necessary for the proper 

performance and functions of EDA. 

Subsequent to the August 11, 2005 

publication of the Interim Final Rule (as 

amended by the December 15, 2005 

Rulemaking), EDA undertook an 

extensive review of its collections of 

information, and thereby changed the 

title of four (4) of its collections of 

information and consolidated three (3) 

collections of information into existing 

information collections. 

Part or section of this final 

rule Nature of request Form/title/OMB Control Number 

301.2; 301.10 ....................... With an application for Investment Assistance, a nonprofit Eligible Applicant must include a resolution 

passed by an authorized representative of a political 

subdivision of a State.

ED–900A, Application for Investment Assistance 

(0610–0094). 

301.3(a); 301.10; 305.3(a)(1) An Eligible Applicant must substantiate Regional eligibility and justify the requested EDA Investment Assistance based on, for example, the unemployment 

rate, per capita income levels, or a Special Need (as 

determined by EDA) in the Region in which the 

Project will be located. The Eligible Applicant also 

must identify and submit to EDA the source of data 

used to substantiate Regional eligibility (e.g., ACS 

data, other Federal data for the Region in which the 

Project will be located, or data available through the 

State government).

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

301.4(b)(1)(i); 305.3(a)(1) .... An Eligible Applicant must provide information on the 

severity of the Region’s unemployment and its duration, the per capita income levels and extent of the 

Region’s unemployment or outmigration.

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

301.4(b)(4) ........................... An Eligible Applicant for a Project under part 306 must 

provide information to show that the Project merits an 

increase to the Investment Rate because of the 

Project’s infeasibility without such an increase, or because the Project will be of no or only incidental benefit to the Eligible Applicant.

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

301.5; 301.10 ....................... An Eligible Applicant must provide information to show 

that Matching Share funds will be available for the 

Project.

ED–900A, Application for Investment Assistance 

(0610–0094). 

301.7 .................................... An Eligible Applicant must submit an Investment proposal on EDA’s pre-application (on Form ED–900P 

or any successor form).

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

301.7(a)(1); 301.10(a) and 

(b).

For Projects selected from successful pre-applications, 

EDA will invite those Eligible Applicants to submit formal applications for Investment Assistance (on Form 

ED–900A or any successor form).

ED–900A, Application for Investment Assistance 

(0610–0094). 

301.10(b)(3) ......................... An Eligible Applicant for a construction Project under 

parts 305 or 307 must include with its application for 

Investment Assistance a CEDS acceptable to EDA 

(pursuant to part 303) or otherwise incorporate by 

reference a current CEDS that EDA approves for the 

proposed Project.

ED–900A, Application for Investment Assistance 

(0610–0094). 

302.7(a) ................................ Recipients must submit requests for amendments to Investment awards in writing to EDA for approval and 

provide information and documentation as EDA 

deems necessary.

Award Amendment Request (0610–0102). 

302.9(a) ................................ An Eligible Applicant must furnish comments on the 

Project from the relevant governmental authority in 

the Region or proof of efforts to obtain comments if 

none were provided by the governmental authority.

ED–900A, Application for Investment Assistance 

(0610–0094). 


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Part or section of this final 

rule Nature of request Form/title/OMB Control Number 

302.10(b)(1) ......................... An Eligible Applicant must certify to EDA the names of 

any persons engaged by or on behalf of the Eligible 

Applicant for the purpose of expediting Investment 

Assistance applications made to EDA.

ED–900A, Application for Investment Assistance 

(0610–0094). 

302.14(a) .............................. Recipients shall keep records of the amount and disposition of awards of Investment Assistance, the total 

cost of the Project, the amount and nature of the portion of the Project costs provided by other sources 

and other records that would facilitate an effective 

audit.

Audits of States, Local Governments, and Non-Profit 

Organizations, OMB Circular A–133. 

302.15 .................................. An Eligible Applicant must certify (and submit evidence 

thereof satisfactory to EDA) that it meets the requirements for receiving Investment Assistance.

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

302.16(b) .............................. Recipients are required to submit reports consisting of 

data-specific evaluations of the Project’s effectiveness.

Government Performance and Results Act (‘‘GPRA’’) 

Performance Validation Forms (0610–0098). 

302.16(c) .............................. EDA may require a Recipient to provide a ‘‘Project 

service map’’ and other information in order to determine which segments of the Region are being assisted with the Investment Assistance.

Project Service Map (0610–0102). 

302.20(d) .............................. Recipients and Other Parties must submit written assurances to EDA that they will comply with anti-discriminatory laws and regulations.ED–900A, Application for Investment Assistance 

(0610–0094). 

303.9(c) ................................ Eligible Applicants for short-term Planning Investment 

Assistance must provide performance measures acceptable to EDA, and provide EDA with progress reports during the term of the Planning Investment.

GPRA Performance Validation Forms (0610–0098). 

304.1; 304.4(a) ..................... To have a Region certified as an EDD, a District Organization must submit information showing that the 

Region contains at least one area subject to the relevant economic distress criteria, is able to foster development on a larger scale than in a single area, 

has an EDA-approved CEDS and obtains commitments from a majority of the relevant counties and 

States.

Comprehensive Economic Development Strategies and 

Planning Investments (0610–0093). 

304.2(c)(2); 304.4(b) ............ The District Organization must demonstrate that its 

governing body is broadly representative of the principal economic interests of the Region.

ED–900A, Application for Investment Assistance 

(0610–0094); Comprehensive Economic Development Strategies and Planning Investments (0610–

0093). 

304.2(c)(4) ............................ The District Organization must notify the public of its 

annual meetings, its decisions, the results of programs, and as reasonably requested, the results of 

audited statements, annual budgets, and minutes of 

public meetings.

Comprehensive Economic Development Strategies and 

Planning Investments (0610–0093). 

305.2(b); 305.3(a)(3) ............ An Eligible Applicant must show that the Public Works 

Project will promote: the growth of industrial or commercial plants, the creation of long-term employment 

opportunities primarily for low-income families, and 

the fulfillment of the Region’s pressing needs.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

305.4(c) ................................ In order to receive any portion of the Investment Assistance for design and engineering work, an Eligible 

Applicant must submit and certify information that 

documents compliance with the Investment awards of 

all design and engineering contracts.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

305.5 .................................... In order to allow a District Organization to administer 

the Project for another Recipient, the Recipient must 

make this request and submit information to EDA 

showing that the Recipient does not have the current 

staff capacity to administer the project, the District 

Organization would be more effective than another 

local business or organization, the District Organization would not subcontract the work, and the costs of 

District Organization administration will not exceed 

the allowable costs were the Recipient administering 

it.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

305.6 .................................... A Recipient may use an alternate construction procurement method to the traditional design/bid/build. If an 

alternate method is used, the Recipient must submit 

to EDA for approval a construction services procurement plan and the Recipient must use a design professional to oversee the process.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 


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Part or section of this final 

rule Nature of request Form/title/OMB Control Number 

305.7 .................................... The Recipient may use ‘‘in-house forces’’ for design, 

construction, inspection, legal services or other work 

on the Project if it submits a sufficient justification to 

EDA.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

305.8(a); 305.8(b) ................ Recipients of EDA construction awards must obtain 

prior approval for the use of furnished equipment and 

materials. Requests must show that costs claimed for 

furnished equipment and materials are competitive 

with local market costs for similar equipment and materials.

ED–900A. Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

305.9 .................................... An EDA construction award Recipient must submit information to EDA regarding why phasing is necessary, a description of the phasing, related costs 

and schedules, and certification that the Recipient 

will pay for overruns and that it is capable of paying 

for incurred costs before the first disbursement.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

305.10 .................................. If at the construction contract bid opening, the lowest 

responsive bid is less than total Project cost, the Recipient will notify EDA to determine whether Investment funds should be deobligated from the Project.

Construction Investments (0610–0096). 

305.11 .................................. Recipients may issue a notice permitting construction 

under contract to commence prior to an EDA determination of award compliance and eligibility for cost 

reimbursement, but will proceed at their own risk until 

EDA review and concurrence. The EDA regional office may request information from the Recipient to 

make a determination of award compliance.

Construction Investments (0610–0096). 

305.12 .................................. EDA requires a Recipient to erect a project sign or 

signs at the Project construction site to indicate that 

the Federal government is participating in the Project. 

The regional office will provide mandatory specifications for Project signage.

Construction Investments (0610–0096). 

305.13 .................................. Recipients involved in a contract change order must 

submit them to EDA for review.

Construction Investments (0610–0096). 

306.2 .................................... EDA selects Projects for Local and National Technical 

Assistance based on the criteria in part 301 and the 

extent to which the Eligible Applicant demonstrates 

that the Project will achieve more specific objectives 

in the Region (as set forth in § 306.2) and meets the 

criteria in the applicable FFO.

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

306.5 .................................... EDA provides Investment Assistance to University Center Projects based on the selection criteria in part 

301, the competitive selection process outlined in the 

applicable FFO, and the extent to which the Eligible 

Applicant demonstrates other more specific, related 

criteria.

ED–900P, Pre-Application for Investment Assistance 

(0610–0094). 

307.5(a) ................................ Each application for Economic Adjustment Assistance 

must include or incorporate by reference (if so approved by EDA) a CEDS.

ED–900A, Application for Investment Assistance 

(0610–0094). 

307.9 .................................... All RLF Recipients must submit to EDA an RLF Plan ... RLF Standard Terms and Conditions (0610–0095). 

307.11(a) .............................. Prior to the disbursement of EDA funds, RLF Recipients must provide in a form acceptable to EDA evidence of fidelity bond coverage and evidence of certification in accordance with § 307.15(b)(1).RLF Standard Terms and Conditions (0610–0095). 

307.11(e) .............................. If the Recipient receives Grant funds and the RLF loan 

disbursement is subsequently delayed beyond 30 

days, the Recipient must notify the applicable grants 

officer and return such non-disbursed funds to EDA.

RLF Standard Terms and Conditions (0610–0095). 

307.12(a)(4) ......................... RLF Recipients must complete an RLF Income and Expense Statement.ED–209I, Income and Expense Statement (0610–

0095). 

307.13(a) .............................. RLF Recipients must maintain Closed Loan files and all 

related documents, books of account, computer data 

files and other records over the term of the Closed 

Loan and for a three-year period from the date of 

final disposition of such Closed Loan.

RLF Standard Terms and Conditions (0610–0095). 

307.13(b) .............................. RLF Recipients must maintain adequate accounting 

records to substantiate the amount of RLF Income 

expended for eligible administrative costs and retain 

records of administrative expenses incurred for activities and equipment relating to the operation of the 

RLF.

RLF Standard Terms and Conditions (0610–0095). 


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Part or section of this final 

rule Nature of request Form/title/OMB Control Number 

307.14(a) .............................. All RLF Recipients must submit semi-annual reports to 

EDA.

ED–209S, Semi-Annual Report (0610–0095). 

307.14(a) .............................. EDA may approve the substitution of annual reports for 

semi-annual reports upon written request by the RLF 

Recipient if the conditions set forth in § 307.14(a)(1)–

(4) are met.

ED–209A, Annual Report (0610–0095). 

307.14(b) .............................. All Recipients must certify as part of the semi-annual or 

annual report that the RLF is operating in accordance 

with the RLF Plan, and describe any modifications to 

the RLF Plan to ensure effective use of the RLF.

ED–209S, Semi-Annual Report (0610–0095). ED–

209A, Annual Report (0610–0095). 

307.14(c) .............................. An RLF Recipient using either fifty percent or more (or 

more than $100,000) of RLF Income for administrative costs in a 12-month reporting period must submit 

a completed Income and Expense Statement annually to the appropriate EDA regional office.

ED–209I, Income and Expense Statement (0610–

0095). 

307.15(b)(1) ......................... Within sixty (60) days prior to the initial disbursement of 

EDA funds, an independent accountant familiar with 

the Recipient’s accounting system shall certify to 

EDA and the Recipient that such system is adequate 

to identify, safeguard and account for all RLF operations.

RLF Standard Terms and Conditions (0610–0095). 

307.15(b)(2) ......................... Prior to the disbursement of any EDA funds, an RLF 

Recipient must certify that standard loan documents 

necessary for lending are in place and that these 

documents have been reviewed by its legal counsel 

for adequacy and compliance with the terms and 

conditions of the Grant and applicable State and 

local law.

RLF Standard Terms and Conditions (0610–0095). 

307.16(b) .............................. Recipients must promptly notify EDA in writing of any 

condition that may adversely affect their ability to 

meet prescribed schedule deadlines. Recipients must 

submit a written request for continued use of Grant 

funds beyond a missed deadline for disbursement of 

RLF funds.

RLF Standard Terms and Conditions (0610–0095). 

307.17(e) .............................. After the full disbursement of Grant funds, RLF Capital 

may be used to guarantee loans of private lenders, 

provided the Recipient has obtained prior written approval from EDA of its proposed loan activities and 

submitted to EDA the three listed items. The Recipient must also amend its RLF Plan to accommodate 

any EDA-approved loan guaranty activities.

RLF Standard Terms and Conditions (0610–0095) 

307.19 .................................. With prior approval from EDA, a Recipient may enter 

into a Sale or Securitization of all or a portion of its 

RLF loan portfolio.

RLF Standard Terms and Conditions (0610–0095). 

307.21(b) .............................. EDA may approve a request from a Recipient to terminate an RLF Grant.RLF Standard Terms and Conditions (0610–0095). 

part 310 ................................ Upon the application of an Eligible Applicant, EDA may 

designate the Region which the Project will serve as 

a Special Impact Area and waive the CEDS requirement if the Eligible Applicant demonstrates that its 

proposed Project will directly fulfill a pressing need 

and assist in preventing excessive unemployment.

Comprehensive Economic Development Strategies and 

Planning Investments (0610–0093). 

314.3(f) ................................. With EDA’s prior written approval, a Recipient may undertake an incidental use of Property that does not 

interfere with the scope of the Project or the economic purpose for which the Investment was made, 

provided it satisfies the conditions set forth in 

§ 314.3(f).

Property Management 0610–0103. 

314.6(b) ................................ In order to use EDA-funded property to secure a mortgage or deed of trust or encumber the property, the 

Recipient must provide information that satisfies one 

or more of the exceptions set forth in § 314.6(b).

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

314.7(a) and (c) ................... The Recipient must provide information that satisfies 

EDA that the Recipient has title to the Real Property 

and all easements, rights-of-way, permits or longterm leases, unless it can provide information proving 

it meets an exception to the rule.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

314.7(b) ................................ The Recipient must provide information regarding all 

encumbrances on the Real Property to EDA.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 


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Part or section of this final 

rule Nature of request Form/title/OMB Control Number 

314.8 .................................... Recipients must execute a lien, covenant or other 

statement of EDA’s interest in all Property acquired 

or improved with EDA Investment Assistance and 

record it in the proper jurisdiction.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

314.9 .................................... Recipients must execute a security interest or other 

statement of EDA’s interest in Personal Property acquired or improved by EDA funds and record the interest in accordance with applicable law.

ED–900A, Application for Investment Assistance 

(0610–0094); Construction Investments (0610–0096). 

314.10 .................................. If a Recipient wishes for EDA to release its Real Property or tangible Personal Property interest before the 

expiration of the Property’s Estimated Useful Life, it 

must submit a request to EDA and either file a covenant of use precluding inherently religious activities 

or purchase EDA’s Federal Share in such Property.

0610–0103. 

315.5(b) ................................ Current or prospective TAACs must submit either a 

new or amended application to EDA, along with a 

proposed budget, narrative scope of work and other 

information as may be requested by EDA.

ED–900A, Application for Investment Assistance 

(0610–0094). 

315.5(c) ................................ TAACs must submit information regarding performance 

to be evaluated by EDA.

GPRA Performance Validation Form (0610–0098). 

315.6(a)(1); 315.7; 315.8 ..... Firms must provide specific information to EDA in order 

to be certified for participation in the TAA program.

ED–840P, Petition by a Firm for Certification of Eligibility to Apply for Trade Adjustment Assistance 

(0610–0091). 

315.6(a)(2); 315.6(a)(3); 

315.16.

A Certified Firm must submit an Adjustment Proposal to 

EDA for approval. If EDA approves the Adjustment 

Proposal, the Firm may then request Adjustment Assistance from the TAAC.

ED–840P, Petition by a Firm for Certification of Eligibility to Apply for Trade Adjustment Assistance 

(0610–0091). 

315.9 .................................... In order to have a public hearing, a Person with a Substantial Interest in an accepted petition for TAA certification must submit a request that follows this section’s procedures.ED–840P, Petition by a Firm for Certification of Eligibility to Apply for Trade Adjustment Assistance 

(0610–0091). 

315.12 .................................. Each TAAC shall keep records disclosing the use of all 

TAA funds.

GPRA Performance Validation Form (0610–0098). 

List of Subjects 

13 CFR Part 300 

Financial assistance, Distressed 

region, Headquarters, Regional offices. 

13 CFR Part 301 

Eligibility requirements, Applicant 

requirements, Economic distress levels, 

Investment rates, Match share 

requirements, Application 

requirements, Proposal selection. 

13 CFR Part 302 

Environmental review, Federal policy 

and procedures, Inter-governmental 

review, Fees, Pre-approval 

requirements, Project administration, 

Reporting and audit requirements, 

Conflicts of interest, Post-approval 

requirements, Civil rights. 

13 CFR Part 303 

Planning, Award and application 

requirements, Comprehensive economic 

development strategy, State plans, 

Short-term planning investments. 

13 CFR Part 304 

Economic development district, 

Organizational requirements, District 

modification and termination, 

Performance evaluations. 

13 CFR Part 305 

Public works, Economic development, 

Award and application requirements, 

Requirements for approved projects. 

13 CFR Part 306 

Training, Research, Technical 

assistance, Award and application 

requirements, University centers, 

Performance evaluations. 

13 CFR Part 307 

Economic adjustment assistance, 

Award and application requirements, 

Revolving loan fund, Pre-loan 

requirements, Merger, Income, Record 

and reporting requirements, Sales and 

securitizations, Liquidation, 

Termination. 

13 CFR Part 308 

Performance awards, Planning 

performance awards. 

13 CFR Part 309 

Redistribution requirements, 

Investment assistance. 

13 CFR Part 310 

Special impact area, Excessive 

unemployment, Special need. 

13 CFR Part 311 

[Reserved] 

13 CFR Part 312 

[Reserved] 

13 CFR Part 313 

[Reserved] 

13 CFR Part 314 

Federal interest, Authorized use, 

Property, Federal share, Title, Release, 

Property interest. 

13 CFR Part 315 

Administrative practice and 

procedure, Trade adjustment assistance, 

Eligible petitioner, Firm selection, 

Certification requirements, 

Recordkeeping and audit requirements, 

Adjustment proposals. 

Regulatory Text 

■ For reasons discussed above, 13 CFR 

chapter III is revised to read as follows: 

13 CFR CHAPTER III 

Economic Development Administration, 

Department of Commerce 

Part 

300 General Information 

301 Eligibility, Investment Rate and 

Proposal and Application Requirements 

302 General Terms and Conditions for 

Investment Assistance 


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303 Planning Investments and 

Comprehensive Economic Development 

Strategies 

304 Economic Development Districts 

305 Public Works and Economic 

Development Investments 

306 Training, Research and Technical 

Assistance Investments 

307 Economic Adjustment Assistance 

Investments 

308 Performance Incentives 

309 Redistributions of Investment 

Assistance 

310 Special Impact Areas 

311 [Reserved] 

312 [Reserved] 

313 [Reserved] 

314 Property 

315 Trade Adjustment Assistance for Firms 

PART 300—GENERAL INFORMATION 

Sec. 

300.1 Introduction and mission. 

300.2 EDA Headquarters and regional 

offices. 

300.3 Definitions. 

Authority: 42 U.S.C. 3121; 42 U.S.C. 3122; 

42 U.S.C. 3211; Department of Commerce 

Organization Order 10–4. 

§ 300.1 Introduction and mission. 

EDA was created by Congress 

pursuant to the Public Works and 

Economic Development Act of 1965 to 

provide financial assistance to both 

rural and urban distressed communities. 

EDA’s mission is to lead the Federal 

economic development agenda by 

promoting innovation and 

competitiveness, preparing American 

regions for growth and success in the 

worldwide economy. EDA will fulfill its 

mission by fostering entrepreneurship, 

innovation and productivity through 

Investments in infrastructure 

development, capacity building and 

business development in order to attract 

private capital investments and higherskill, higher-wage jobs to Regions 

experiencing substantial and persistent 

economic distress. EDA works in 

partnership with distressed Regions to 

address problems associated with longterm economic distress as well as to 

assist those Regions experiencing 

sudden and severe economic 

dislocations, such as those resulting 

from natural disasters, conversions of 

military installations, changing trade 

patterns and the depletion of natural 

resources. EDA Investments generally 

take the form of Grants to or Cooperative 

Agreements with Eligible Recipients. 

§ 300.2 EDA Headquarters and regional 

offices. 

(a) EDA’s Headquarters Office is 

located at: U.S. Department of 

Commerce, Economic Development 

Administration, 14th Street and 

Constitution Avenue, NW., Washington, 

DC 20230. 

(b) EDA has regional offices 

throughout the United States and each 

regional office’s contact information 

may be found on EDA’s Internet Web 

site at http://www.eda.gov or in the 

notice of Federal Funding Opportunity 

published annually by EDA. Please 

contact the appropriate regional office to 

learn about EDA Investment 

opportunities in your Region. 

§ 300.3 Definitions. 

As used in this chapter, the following 

terms shall have the following 

meanings: 

Assistant Secretary means the 

Assistant Secretary for Economic 

Development within the Department. 

Comprehensive Economic 

Development Strategy or CEDS means a 

strategy that meets the requirements of 

§ 303.7 of this chapter. 

Cooperative Agreement means the 

financial assistance award of EDA funds 

to an Eligible Recipient under PWEDA, 

where substantial involvement is 

expected between EDA and the Eligible 

Recipient in carrying out the activities 

contemplated in an agreement between 

the parties. See 31 U.S.C. 6305. 

Department means the U.S. 

Department of Commerce. 

District Organization means an 

organization meeting the requirements 

of § 304.2 of this chapter. 

Economic Development District or 

District or EDD means any Region in the 

United States designated by EDA as an 

Economic Development District under 

§ 304.1 of this chapter (or such 

regulation as was previously in effect 

before the effective date of this section) 

and also includes any economic 

development district designated as such 

under section 403 of PWEDA, as in 

effect on February 10, 1999. 

EDA means the Economic 

Development Administration within the 

Department. 

Eligible Applicant means an entity 

qualified to be an Eligible Recipient or 

its authorized representative. 

Eligible Recipient means any of the 

following: 

(1) City or other political subdivision 

of a State, including a special purpose 

unit of State or local government 

engaged in economic or infrastructure 

development activities, or a consortium 

of political subdivisions; 

(2) State; 

(3) Institution of higher education or 

a consortium of institutions of higher 

education; 

(4) Public or private non-profit 

organization or association, including a 

community or faith-based non-profit 

organization, acting in cooperation with 

officials of a political subdivision of a 

State; 

(5) District Organization; 

(6) Indian Tribe or a consortium of 

Indian Tribes; or 

(7) Private individual or for-profit 

organization, but only for Training, 

Research and Technical Assistance 

Investments under part 306 of this 

chapter. 

Federal Agency means a department, 

agency or instrumentality of the United 

States government. 

Federal Funding Opportunity or FFO 

means the notice EDA publishes 

annually at http://www.grants.gov and 

on EDA’s Internet Web site at http:// 

www.eda.gov that describes the 

amounts, particular application 

procedures, funding priorities, special 

circumstances and other relevant 

information concerning EDA’s 

Investment programs for the year. EDA 

may also periodically publish FFOs on 

specific programs or initiatives. 

Federally-Declared Disaster means a 

Presidentially-Declared Disaster, a 

fisheries resource disaster pursuant to 

section 312(a) of the Magnuson-Stevens 

Fishery Conservation and Management 

Act, as amended (16 U.S.C. 1861a(a)), or 

other federally-declared disasters 

pursuant to applicable law. 

Grant means the financial assistance 

award of EDA funds to an Eligible 

Recipient under PWEDA, where the 

Eligible Recipient bears responsibility 

for carrying out the activities 

contemplated in an agreement between 

the parties. See 31 U.S.C. 6304. 

Immediate Family means a person’s 

spouse, parents, grandparents, siblings, 

children and grandchildren, but does 

not include distant relatives, such as 

cousins, unless the distant relative lives 

in the same household as the person. 

In-Kind Contribution(s) means noncash contributions, which may include 

contributions of space, equipment, 

services and assumptions of debt that 

are fairly evaluated by EDA and that 

satisfy applicable Federal cost 

principles and the requirements of 15 

CFR parts 14 or 24, as applicable. 

Indian Tribe means any Indian tribe, 

band, nation, pueblo, or other organized 

group or community, including any 

Alaska Native Village or Regional 

Corporation as defined in or established 

under the Alaska Native Claims 

Settlement Act, as amended (43 U.S.C. 

1601 et seq.), that is recognized as 

eligible for the special programs and 

services provided by the United States 

to Indians because of their status as 

Indians. This term includes the 

governing body of an Indian tribe, nonprofit Indian corporation (restricted to 


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Indians), Indian authority, or other nonprofit Indian tribal organization or 

entity; provided that the Indian tribal 

organization or entity is wholly owned 

by, and established for the benefit of, 

the Indian tribe or Alaska Native 

Village. 

Interested Party means any officer, 

employee or member of the board of 

directors or other governing board of the 

Recipient, including any other parties 

that advise, approve, recommend or 

otherwise participate in the business 

decisions of the Recipient, such as 

agents, advisors, consultants, attorneys, 

accountants or shareholders. An 

Interested Party also includes the 

Interested Party’s Immediate Family and 

other persons directly connected to the 

Interested Party by law or through a 

business arrangement. 

Investment or Investment Assistance 

means an EDA Grant or Cooperative 

Agreement entered into by EDA and a 

Recipient. 

Investment Rate means, as set forth in 

§ 301.4 of this chapter, the amount of 

the EDA Investment in a particular 

Project expressed as a percentage of the 

total Project costs. 

Local Share or Matching Share means 

the non-EDA funds and any In-Kind 

Contributions that are approved by EDA 

and provided by Recipients or third 

parties as a condition of an Investment. 

The Matching Share may include funds 

from other Federal Agencies only if 

authorized by statute that allows such 

use, which may be determined by EDA’s 

reasonable interpretation of such 

authority. 

Presidentially-Declared Disaster 

means a major disaster or emergency 

declared under the Robert T. Stafford 

Disaster Relief and Emergency 

Assistance Act, as amended (42 U.S.C. 

5121 et seq.). 

Private Sector Representative means, 

with respect to any for-profit enterprise, 

any senior management official or 

executive holding a key decisionmaking position, or that person’s 

designee. 

Project means the proposed or 

authorized activity (or activities) the 

purpose of which fulfills EDA’s mission 

and program requirements as set forth in 

PWEDA and this chapter and which 

may be funded in whole or in part by 

EDA Investment Assistance. 

PWEDA means the Public Works and 

Economic Development Act of 1965, as 

amended (42 U.S.C. 3121 et seq.), 

including the comprehensive 

amendments made by the Economic 

Development Administration 

Reauthorization Act of 2004 (Pub. L. 

108–373, 118 Stat. 1756). 

Recipient means an entity receiving 

EDA Investment Assistance, including 

any EDA-approved successor to the 

entity. 

Region or Regional means an 

economic unit of human, natural, 

technological, capital or other resources, 

defined geographically. Geographic 

areas comprising a Region need not be 

contiguous or defined by political 

boundaries, but should constitute a 

cohesive area capable of undertaking 

self-sustained economic development. 

For the limited purposes of determining 

economic distress levels and Investment 

Rates pursuant to part 301 of this 

chapter, a Region may also comprise a 

specific geographic area defined solely 

by its level of economic distress, as set 

forth in §§ 301.3(a)(2) and 301.3(a)(3) of 

this chapter. 

Regional Commission means any of 

the following: 

(1) The Appalachian Regional 

Commission established under chapter 

143 of title 40, United States Code; 

(2) The Delta Regional Authority 

established under subtitle F of the 

Consolidated Farm and Rural 

Development Act (7 U.S.C. 2009aa et 

seq.); 

(3) The Denali Commission 

established under the Denali 

Commission Act of 1998 (42 U.S.C. 3121 

note; 112 Stat. 2681–637 et seq.); or 

(4) The Northern Great Plains 

Regional Authority established under 

subtitle G of the Consolidated Farm and 

Rural Development Act (7 U.S.C. 

2009bb et seq.). 

Special Impact Area means a Region 

served by a Project for which the 

requirements of section 302 of PWEDA 

and § 303.7 of this chapter have, upon 

an application filed by an Eligible 

Recipient pursuant to section 214 of 

PWEDA and part 310 of this chapter, 

been waived in whole or in part by the 

Assistant Secretary. 

Special Need means a circumstance or 

legal status arising from actual or 

threatened severe unemployment or 

economic adjustment problems 

resulting from severe short-term or longterm changes in economic conditions, 

including: 

(1) Substantial outmigration or 

population loss; 

(2) Underemployment; that is, 

employment of workers at less than fulltime or at less skilled tasks than their 

training or abilities permit; 

(3) Military base closures or 

realignments, defense contractor 

reductions-in-force, or U.S. Department 

of Energy defense-related funding 

reductions; 

(4) Natural or other major disasters or 

emergencies; 

(5) Extraordinary depletion of natural 

resources; 

(6) Closing or restructuring of an 

industrial firm or loss of a major 

employer; 

(7) Negative effects of changing trade 

patterns; or 

(8) Other circumstances set forth in an 

FFO. 

State means a State of the United 

States, the District of Columbia, the 

Commonwealth of Puerto Rico, the U.S. 

Virgin Islands, Guam, American Samoa, 

the Commonwealth of the Northern 

Mariana Islands, the Republic of the 

Marshall Islands, the Federated States of 

Micronesia, and the Republic of Palau. 

Trade Act means title II, chapters 3 

and 5, of the Trade Act of 1974, as 

amended (19 U.S.C. 2341 et seq.). 

United States means all of the States. 

PART 301— ELIGIBILITY, 

INVESTMENT RATE AND PROPOSAL 

AND APPLICATION REQUIREMENTS 

Subpart A—General 

Sec. 

301.1 Overview of eligibility requirements. 

Subpart B—Applicant Eligibility 

301.2 Applicant eligibility. 

Subpart C—Economic Distress Criteria 

301.3 Economic distress levels. 

Subpart D—Investment Rates and Matching 

Share Requirements 

301.4 Investment rates. 

301.5 Matching share requirements. 

301.6 Supplementary investment 

assistance. 

Subpart E—Proposal and Application 

Requirements; Evaluation Criteria 

301.7 Investment assistance proposal. 

301.8 Proposal evaluation criteria. 

301.9 Proposal selection criteria. 

301.10 Formal application requirements. 

Authority: 42 U.S.C. 3121; 42 U.S.C. 3141–

3147; 42 U.S.C. 3149; 42 U.S.C. 3161; 42 

U.S.C. 3175; 42 U.S.C. 3192; 42 U.S.C. 3194; 

42 U.S.C. 3211; 42 U.S.C. 3233; Department 

of Commerce Delegation Order 10–4. 

Subpart A—General 

§ 301.1 Overview of eligibility 

requirements. 

In order to receive EDA Investment 

Assistance, an applicant and the Project 

proposed by the applicant must satisfy 

each of the following requirements: 

(a) The applicant must be an Eligible 

Applicant as set forth in subpart B of 

this part; 

(b) The Region in which the Project 

will be located must meet the economic 

distress criteria set forth in subpart C of 

this part; 

(c) The sources of funding for the 

Project must fulfill the Investment Rate 


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and Matching Share requirements set 

forth in subpart D of this part; 

(d) EDA must select the Eligible 

Applicant’s Project and the Eligible 

Applicant must satisfy the formal 

application requirements set forth in 

subpart E of this part; and 

(e) The Project must meet the general 

requirements set forth in part 302 

(General Terms and Conditions for 

Investment Assistance) and the specific 

program requirements (as applicable) set 

forth in part 303 (Planning Investments 

and Comprehensive Economic 

Development Strategies), part 304 

(Economic Development Districts), part 

305 (Public Works and Economic 

Development Investments), part 306 

(Training, Research and Technical 

Assistance Investments), or part 307 

(Economic Adjustment Assistance 

Investments) of this chapter. 

Subpart B—Applicant Eligibility 

§ 301.2 Applicant eligibility. 

(a) An Eligible Applicant for EDA 

Investment Assistance is defined in 

§ 300.3 of this chapter. 

(b) An Eligible Applicant that is a 

non-profit organization must include in 

its application for Investment 

Assistance a resolution passed by (or a 

letter signed by) an authorized 

representative of a general purpose 

political subdivision of a State, 

acknowledging that it is acting in 

cooperation with officials of such 

political subdivision. EDA may waive 

this cooperation requirement for certain 

Projects of a significant Regional or 

national scope under parts 306 or 307 of 

this chapter. See §§ 306.3(b), 306.6(b) 

and 307.5(b) of this chapter. 

Subpart C—Economic Distress Criteria 

§ 301.3 Economic distress levels. 

(a) Part 305 (Public Works and 

Economic Development Investments) 

and part 307 (Economic Adjustment 

Assistance Investments). 

(1) Except as otherwise provided by 

this paragraph (a), for a Project to be 

eligible for Investment Assistance under 

parts 305 or 307 of this chapter, the 

Project must be located in a Region that, 

on the date EDA receives an application 

for Investment Assistance, is subject to 

one (or more) of the following economic 

distress criteria: 

(i) An unemployment rate that is, for 

the most recent twenty-four (24) month 

period for which data are available, at 

least one (1) percent greater than the 

national average unemployment rate; 

(ii) Per capita income that is, for the 

most recent period for which data are 

available, eighty (80) percent or less of 

the national average per capita income; 

or 

(iii) A Special Need, as determined by 

EDA. 

(2) A Project located within an 

Economic Development District, which 

is located in a Region that does not meet 

the economic distress criteria of 

paragraph (a)(1) of this section, is also 

eligible for Investment Assistance under 

parts 305 or 307 of this chapter if EDA 

determines that the Project will be of 

‘‘substantial direct benefit’’ to a 

geographic area within the District that 

meets the criteria of paragraph (a)(1) of 

this section. For this purpose, a Project 

provides a ‘‘substantial direct benefit’’ if 

it provides significant employment 

opportunities for unemployed, 

underemployed or low-income residents 

of the geographic area within the 

District. 

(3) A Project located in a geographic 

area of poverty or high unemployment 

that meets the requirements of 

paragraph (a)(1) of this section, but 

which is located in a Region that overall 

does not meet the requirements of 

paragraph (a)(1) of this section, is 

eligible for Investment Assistance under 

parts 305 or 307 of this chapter without 

regard to political or other subdivisions 

or boundaries. 

(4) EDA will determine the economic 

distress levels pursuant to this 

subsection at the time EDA receives an 

application for Investment Assistance as 

follows: 

(i) For economic distress levels based 

upon the unemployment rate or per 

capita income requirements, EDA will 

base its determination upon the most 

recent American Community Survey 

(‘‘ACS’’) published by the U.S. Census 

Bureau for either: The Region where the 

Project will be located (paragraph (a)(1) 

of this section), the geographic area 

where substantial direct Project benefits 

will occur (paragraph (a)(2) of this 

section), or the geographic area of 

poverty or high unemployment 

(paragraph (a)(3) of this section), as 

applicable. Where a recent ACS is not 

available, EDA will base its decision 

upon the most recent Federal data from 

other sources (including data available 

from the Census Bureau and the 

Bureaus of Economic Analysis, Labor 

Statistics, Indian Affairs or any other 

Federal source determined by EDA to be 

appropriate). If no Federal data are 

available, an Eligible Applicant must 

submit to EDA the most recent data 

available from the State. 

(ii) For economic distress based upon 

a Special Need, EDA will conduct the 

independent analysis it deems 

necessary under the facts and 

circumstances of a given case. Eligible 

Applicants are encouraged to submit 

reliable data substantiating their claim 

of a Special Need. 

(b) Part 303 (Planning Investments) 

and part 306 (Training, Research and 

Technical Assistance Investments). 

There are no minimum economic 

distress level requirements for 

Investment Assistance awarded to 

Projects under parts 303 or 306 of this 

chapter. 

(c) Part 304 (Economic Development 

Districts). For EDA to designate a Region 

as an Economic Development District 

under part 304 of this chapter, such 

Region must: 

(1) Contain at least one (1) geographic 

area that fulfills the economic distress 

criteria set forth in paragraph (a)(1) of 

this section and is identified in an 

approved CEDS; and 

(2) Meet the Regional eligibility 

requirements set forth in § 304.1 of this 

chapter. 

(d) EDA reserves the right to reject 

any documentation of Project eligibility 

that it determines is inaccurate or 

otherwise unreliable. 

Subpart D—Investment Rates and 

Matching Share Requirements 

§ 301.4 Investment rates. 

(a) Minimum Investment Rate. There 

is no minimum Investment Rate for a 

Project. 

(b) Maximum Investment Rate. 

(1) General rule. Except as otherwise 

provided by this paragraph (b) or 

paragraph (c) of this section, the 

maximum EDA Investment Rate for all 

Projects shall, after the application of 

Table 1 in paragraph (b)(1)(ii) of this 

subsection, not exceed the sum of: (x) 

Fifty (50) percent, plus (y) up to an 

additional thirty (30) percent based on 

the relative needs of the Region in 

which the Project is located, as 

determined by EDA. 

(i)(A) Relative needs. In determining 

the relative needs of the Region in 

which the Project is located, EDA will 

prioritize allocations of its Investment 

Assistance to ensure that the level of 

economic distress of a Region, rather 

than a preference for a specific 

geographic area or a specific type of 

economic distress, is the primary factor 

in allocating its Investment Assistance. 

In making this determination, EDA will 

take into consideration the following 

measures of economic distress: 

(1) The severity of the unemployment 

rate and the duration of the 

unemployment in the Region; 

(2) The per capita income levels and 

the extent of underemployment in the 

Region; 

(3) The outmigration of population 

and the extent to which such 


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outmigration is causing economic injury 

in the Region; and 

(4) Such other factors as EDA deems 

relevant in determining the relative 

needs of the Region in which the Project 

is located. 

(B) A Project is eligible for the 

maximum allowable Investment Rate as 

determined by EDA between the time 

EDA receives the application for 

Investment Assistance and the time that 

EDA awards Investment Assistance to 

the Project; however, the burden is on 

the Eligible Applicant to establish the 

relative needs of the Region in which 

the Project is located. 

(ii) Table 1. Table 1 of this paragraph 

sets forth the maximum allowable 

Investment Rate for Projects located in 

Regions subject to certain levels of 

economic distress. In cases where Table 

1 produces divergent results (i.e., where 

Table 1 produces more than one (1) 

maximum allowable Investment Rate 

based on the Region’s levels of 

economic distress), the higher 

Investment Rate produced by Table 1 

shall be the maximum allowable 

Investment Rate for the Project. 

TABLE 1 

Projects located in regions in which: 

Maximum 

allowable investment rates 

(percentage) 

(A) The twenty-four (24) month unemployment rate is at least 225% of the national average; or .................................................... 80 

(B) The per capita income is not more than 50% of the national average ........................................................................................ 80 

(C) The twenty-four (24) month unemployment rate is at least 200% of the national average; or .................................................... 70 

(D) The per capita income is not more than 60% of the national average ........................................................................................ 70 

(E) The twenty-four (24) month unemployment rate is at least 175% of the national average; or .................................................... 60 

(F) The per capita income is not more than 65% of the national average ......................................................................................... 60 

(G) The twenty-four (24) month unemployment rate is at least 1% greater than the national average; or ....................................... 50 

(H) The per capita income is not more than 80% of the national average ........................................................................................ 50 

(2) Projects subject to a Special Need. 

EDA shall determine the maximum 

allowable Investment Rate for Projects 

subject to a Special Need (as determined 

by EDA pursuant to § 301.3(a)(1)(iii)) 

based on the actual or threatened overall 

economic situation of the Region in 

which the Project is located. However, 

unless the Project is eligible for a higher 

Investment Rate pursuant to paragraph 

(b)(5) of this section, the maximum 

Investment Rate for any Project subject 

to a Special Need shall be eighty (80) 

percent. 

(3) Projects under part 303. 

(i) The minimum Investment Rate for 

Projects under part 303 of this chapter 

shall be fifty (50) percent. 

(ii) Except as otherwise provided in 

paragraph (b)(3)(iii) of this section or in 

paragraph (b)(5) of this section, the 

maximum allowable Investment Rate for 

Projects under part 303 of this chapter 

shall be the maximum allowable 

Investment Rate set forth in Table 1 for 

the most economically distressed 

county or other equivalent political unit 

(e.g., parish) within the Region. The 

maximum allowable Investment Rate 

shall not exceed eighty (80) percent. 

(iii) In compelling circumstances, the 

Assistant Secretary may waive the 

application of the first sentence in 

paragraph (b)(3)(ii) of this section. The 

Assistant Secretary shall not delegate 

the authority to grant a waiver under 

this paragraph. 

(4) Projects under part 306. The 

maximum allowable Investment Rate for 

Projects under part 306 of this chapter 

shall generally be determined based on 

the relative needs (as determined under 

paragraph (b)(1) of this section) of the 

Region which the Project will serve. 

However, for Projects of a national 

scope under part 306 of this chapter and 

for all other Projects under part 306 of 

this chapter (after the application of 

paragraph (b)(1) of this section), the 

Assistant Secretary has the discretion to 

establish a maximum Investment Rate of 

up to one hundred (100) percent where 

the Project: 

(i) Merits, and is not otherwise 

feasible without, an increase to the 

Investment Rate; or 

(ii) Will be of no or only incidental 

benefit to the Eligible Recipient. 

(5) Special Projects. Table 2 of this 

paragraph sets forth the maximum 

allowable Investment Rate for certain 

special Projects as follows: 

TABLE 2 

Projects 

Maximum 

allowable investment rates 

(percentage) 

Projects of Indian Tribes ...................................................................................................................................................................... 100 

Projects under part 307 of this chapter located in Presidentially-Declared Disaster areas for which EDA receives an application

for Investment Assistance for post-disaster economic recovery efforts pursuant to a supplemental appropriation within eighteen (18) months of the date of such declaration ............................................................................................................................ 100 

Projects of States or political subdivisions of States that the Assistant Secretary determines have exhausted their effective taxing and borrowing capacity, or Projects of non-profit organizations that the Assistant Secretary determines have exhausted 

their effective borrowing capacity .................................................................................................................................................... 100 

Projects under parts 305 or 307 that receive performance awards pursuant to § 308.2 of this chapter ........................................... 100 

Projects located in a District that receive planning performance awards pursuant to § 308.3 of this chapter .................................. 100 

(c) Federal Funding Opportunity 

notices may provide additional 

Investment Rate criteria and standards 

to ensure that the level of economic 

distress of a Region, rather than a 

preference for a geographic area or a 

specific type of economic distress, is the 

primary factor in allocating Investment 

Assistance. 


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§ 301.5 Matching share requirements. 

The required Matching Share of a 

Project’s eligible costs may consist of 

cash or In-Kind Contributions. In 

addition, the Eligible Applicant must 

show that the Matching Share is 

committed to the Project, will be 

available as needed and is not or will 

not be conditioned or encumbered in 

any way that would preclude its use 

consistent with the requirements of the 

Investment Assistance. 

§ 301.6 Supplementary investment 

assistance. 

(a) Pursuant to a request by an Eligible 

Applicant, EDA Investment Assistance 

may supplement grants awarded in 

another ‘‘designated Federal grant 

program,’’ if the Eligible Applicant 

qualifies for financial assistance under 

such program, but is unable to provide 

the required non-Federal share because 

of the Eligible Applicant’s economic 

situation. For purposes of this section, 

a ‘‘designated Federal grant program’’

means any Federal grant program that: 

(1) Provides assistance in the 

construction or equipping of public 

works, public service or development 

facilities; 

(2) Is designated by EDA as eligible 

for supplementary Investment 

Assistance under this section; and 

(3) Assists Projects that are otherwise 

eligible for Investment Assistance and 

consistent with the Eligible Applicant’s 

CEDS. 

(b) For Projects located in Regions 

meeting the criteria of § 301.3(a), the 

EDA Investment Assistance, combined 

with funds from a designated Federal 

grant program, may be at the maximum 

allowable Investment Rate, even if the 

designated Federal grant program has a 

lower grant rate. If the designated 

Federal grant program has a grant rate 

higher than the maximum EDA 

Investment Rate, the combination of 

EDA Investment and other Federal 

funds may exceed the EDA Investment 

Rate; provided, the EDA share of total 

funding does not exceed the maximum 

allowable Investment Rate. 

Subpart E—Proposal and Application 

Requirements; Evaluation Criteria 

§ 301.7 Investment Assistance proposal. 

(a) The EDA Investment Assistance 

process begins with the submission of 

an Investment Assistance proposal. 

Investment proposals are submitted on 

a Pre-application for Investment 

Assistance (Form ED–900P or any 

successor form) that may be obtained 

from EDA’s Internet Web site at http:// 

www.eda.gov or from the appropriate 

regional office. EDA generally accepts 

proposals on a competitive and 

continuing basis to respond to market 

forces in Regional economies. The 

timing with which competitive 

investment opportunities arise, as 

determined by the criteria set forth in 

§ 301.8, paired with the availability of 

funds in a given fiscal year, will affect 

EDA’s ability to participate in any given 

Project. EDA will evaluate all proposals 

using the criteria set forth in § 301.8 and 

will: 

(1) Solicit a formal application from 

the proponent; 

(2) Return the proposal to the 

proponent for specified deficiencies and 

suggest resubmission upon corrections; 

or 

(3) Deny the proposal for specifically 

stated reasons and notify the proponent. 

(b) For certain programs, EDA may 

instruct an Eligible Applicant to submit 

an Application for Investment 

Assistance (Form ED–900A or any 

successor form) in lieu of the Preapplication for Investment Assistance 

(Form ED–900P or any successor form). 

§ 301.8 Proposal evaluation criteria. 

EDA will screen all proposals for the 

feasibility of the budget presented and 

conformance with EDA statutory and 

regulatory requirements. EDA will 

assess the economic development needs 

of the affected Region in which the 

proposed Project will be located (or will 

service), as well as the capability of the 

proponent to implement the proposed 

Project. EDA will also consider the 

degree to which an Investment in the 

proposed Project will satisfy one (1) or 

more of the following criteria: 

(a) Is market-based and results driven. 

An Investment will capitalize on a 

Region’s competitive strengths and will 

positively move a Regional economic 

indicator measured and evaluated by 

EDA on a performance matrix system, 

such as EDA’s Balanced Scorecard or 

other performance matrix. These 

Regional economic indicators include 

measures such as an increased number 

of higher-skill, higher-wage jobs, 

increased tax revenue, or increased 

private sector investment resulting from 

an Investment. 

(b) Has strong organizational 

leadership. An Investment will have 

strong leadership, relevant Project 

management experience and a 

significant commitment of human 

resources talent to ensure a Project’s 

successful execution. 

(c) Advances productivity, innovation 

and entrepreneurship. An Investment 

will embrace the principles of 

entrepreneurship, enhance Regional 

industry clusters and leverage and link 

technology innovators and local 

universities to the private sector to 

create the conditions for greater 

productivity, innovation, and job 

creation. 

(d) Looks beyond the immediate 

economic horizon, anticipates economic 

changes and diversifies the local and 

Regional economy. An Investment will 

be part of an overarching, long-term 

Comprehensive Economic Development 

Strategy that enhances a Region’s 

success in achieving a rising standard of 

living by supporting existing industry 

clusters, developing emerging new 

clusters or attracting new Regional 

economic drivers. 

(e) Demonstrates a high degree of 

local commitment. An Investment will 

exhibit: 

(1) High levels of local government or 

non-profit Matching Share and private 

sector leverage; 

(2) Clear and unified leadership and 

support by local elected officials; and 

(3) Strong cooperation among the 

business sector, relevant Regional 

partners and Federal, State and local 

governments. 

(f) Other criteria as set forth in the 

applicable FFO. 

§ 301.9 Proposal selection criteria. 

(a) EDA will review completed 

proposal materials for compliance with 

the requirements set forth in PWEDA, 

this chapter, the applicable FFO and 

other applicable Federal statutes and 

regulations. From those proposals that 

meet EDA’s technical and legal 

requirements, EDA will select proposals 

for further consideration based on: 

(1) The availability of funds; 

(2) The competitiveness of the 

proposals based on the criteria set forth 

in § 301.8; and 

(3) The funding priority 

considerations identified in the 

applicable FFO. 

(b) EDA will endeavor to notify 

proponents regarding whether their 

proposals are selected as soon as 

practicable. 

§ 301.10 Formal application requirements. 

(a) General. For Projects selected from 

successful proposals, EDA will invite 

the proponents to submit a formal 

application for Investment Assistance. 

The appropriate regional office will 

provide application materials and 

guidance in completing them. The 

applicant will generally have thirty (30) 

days to submit the completed 

application materials to the applicable 

regional office. EDA staff will work with 

the applicant to resolve application 

deficiencies. 

(b) Formal application. Each formal 

application for EDA Investment 

Assistance must: 


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(1) Include evidence of applicant 

eligibility (as set forth in § 301.2) and of 

economic distress (as set forth in 

§ 301.3); 

(2) Identify the sources of funds, both 

eligible Federal and non-EDA, and InKind Contributions that will constitute 

the required Matching Share for the 

Project (see the Matching Share 

requirements under § 301.5); and 

(3) For construction Projects under 

parts 305 or 307 of this chapter, include 

a CEDS acceptable to EDA pursuant to 

part 303 of this chapter or otherwise 

incorporate by reference a current CEDS 

that EDA approves for the Project. The 

requirements of the preceding sentence 

shall not apply to: 

(i) Strategy Grants, as defined in 

§ 307.3 of this chapter; and 

(ii) Projects located in a Region 

designated as a Special Impact Area 

pursuant to part 310 of this chapter. 

PART 302—GENERAL TERMS AND 

CONDITIONS FOR INVESTMENT 

ASSISTANCE 

Sec. 

302.1 Environment. 

302.2 Procedures in disaster areas. 

302.3 Project servicing for loans, loan 

guaranties and Investment Assistance. 

302.4 Public information. 

302.5 Relocation assistance and land 

acquisition policies. 

302.6 Additional requirements; Federal 

policies and procedures. 

302.7 Amendments and changes. 

302.8 Pre-approval Investment Assistance 

costs. 

302.9 Inter-governmental review of Projects. 

302.10 Attorneys’ and consultants’ fees; 

employment of expediters and 

administrative employees. 

302.11 Economic development information 

clearinghouse. 

302.12 Project administration, operation 

and maintenance. 

302.13 Maintenance of standards. 

302.14 Records and audits. 

302.15 Acceptance of certifications by 

Eligible Applicants. 

302.16 Reports by recipients. 

302.17 Conflicts of interest. 

302.18 Post-approval requirements. 

302.19 Indemnification. 

302.20 Civil rights. 

Authority: 19 U.S.C. 2341 et seq.; 42 U.S.C. 

3150; 42 U.S.C. 3152; 42 U.S.C. 3153; 42 

U.S.C. 3192; 42 U.S.C. 3193; 42 U.S.C. 3194; 

42 U.S.C. 3211; 42 U.S.C. 3212; 42 U.S.C. 

3216; 42 U.S.C. 3218; 42 U.S.C. 3220; 42 

U.S.C. 5141; Department of Commerce 

Delegation Order 10–4. 

§ 302.1 Environment. 

EDA will undertake environmental 

reviews of Projects in accordance with 

the requirements of the National 

Environmental Policy Act of 1969, as 

amended (Pub. L. 91–190; 42 U.S.C. 

4321 et seq., as implemented under 40 

CFR chapter V) (‘‘NEPA’’), and all 

applicable Federal environmental 

statutes, regulations and Executive 

Orders. These authorities include the 

implementing regulations of NEPA 

requiring EDA to provide public notice 

of the availability of project-specific 

environmental documents, such as 

environmental impact statements, 

environmental assessments, findings of 

no significant impact, and records of 

decision, to the affected or interested 

public, as specified in 40 CFR 1506.6(b). 

Depending on the Project’s location, 

environmental information concerning 

specific Projects can be obtained from 

the Environmental Officer in the 

appropriate EDA regional office as listed 

in the applicable FFO. 

§ 302.2 Procedures in disaster areas. 

When non-statutory EDA 

administrative or procedural conditions 

for Investment Assistance awards under 

PWEDA cannot be met by an Eligible 

Applicant as the result of a disaster, 

EDA may waive such conditions. 

§ 302.3 Project servicing for loans, loan 

guaranties and Investment Assistance. 

EDA will provide Project servicing to 

borrowers who received EDA loans or 

EDA-guaranteed loans and to lenders 

who received EDA loan guaranties 

under any EDA-administered program. 

Project servicing includes but is not 

limited to loans made under PWEDA 

prior to the effective date of the 

Economic Development Administration 

Reform Act of 1998, the Trade Act and 

the Community Emergency Drought 

Relief Act of 1977 (Pub. L. 95–31; 42 

U.S.C. 5184 note). 

(a) EDA will continue to monitor such 

loans and loan guaranties in accordance 

with the applicable loans or loan 

guaranty program(s). 

(b) Borrowers and lenders shall 

submit to EDA any requests for 

modifications of their loan or loan 

guaranty agreements with EDA, as 

applicable. EDA shall consider and 

respond to such modification requests 

in accordance with applicable laws and 

policies, including the budgetary 

constraints imposed by the Federal 

Credit Reform Act of 1990, as amended 

(2 U.S.C. 661c(e)). 

(c) In the event that EDA determines 

it necessary or desirable to take actions 

to protect or further the interests of EDA 

in connection with loans, loan 

guaranties or evidence of purchased 

debt, EDA may: 

(1) Assign or sell at public or private 

sale or otherwise dispose of for cash or 

credit, in its discretion and upon such 

terms and conditions as it shall 

determine to be reasonable, any 

evidence of debt, contract, claim, 

personal or real property, or security 

assigned to or held by it in connection 

with any EDA loans, EDA-guaranteed 

loans or Investment Assistance 

extended under PWEDA; 

(2) Collect or compromise all 

obligations assigned to or held by it in 

connection with any EDA loans, EDAguaranteed loans or Investment 

Assistance awarded under PWEDA until 

such time as such obligations may be 

referred to the Attorney General of the 

United States for suit or collection; and 

(3) Take any and all other actions 

determined to be necessary or desirable 

in purchasing, servicing, compromising, 

modifying, liquidating, or otherwise 

administratively processing or disposing 

of loans or loan guaranties made or 

evidence of purchased debt in 

connection with any EDA loans, EDAguaranteed loans or Investment 

Assistance awarded under PWEDA. 

§ 302.4 Public information. 

The rules and procedures regarding 

public access to EDA’s records pursuant 

to the Freedom of Information Act of 

1967, as amended (5 U.S.C. 552), and 

the Privacy Act of 1974, as amended (5 

U.S.C. 552a), are at 15 CFR part 4. 

§ 302.5 Relocation assistance and land 

acquisition policies. 

Recipients of EDA Investment 

Assistance under PWEDA and the Trade 

Act (States and political subdivisions of 

States and non-profits organizations, as 

applicable) are subject to the Uniform 

Relocation Assistance and Real Property 

Acquisition Policies Act of 1970, as 

amended (Pub. L. 91–646; 42 U.S.C. 

4601 et seq.). See 15 CFR part 11 and 

49 CFR part 24 for specific compliance 

requirements. 

§ 302.6 Additional requirements; Federal 

policies and procedures. 

Recipients are subject to all Federal 

laws and to Federal, Department and 

EDA policies, regulations and 

procedures applicable to Federal 

financial assistance awards, including 

but not limited to 15 CFR part 14, the 

Uniform Administrative Requirements 

for Grants and Cooperative Agreements 

with Institutions of Higher Education, 

Hospitals, other Non-Profit and 

Commercial Organizations, and 15 CFR 

part 24, the Uniform Administrative 

Requirements for Grants and 

Cooperative Agreements to State and 

Local Governments, as applicable. 

§ 302.7 Amendments and changes. 

(a) Recipients shall submit requests 

for amendments to Investment awards 

in writing to EDA for approval and shall 

provide such information and 


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documentation as EDA deems necessary 

to justify the request. 

(b) Any changes to Projects made 

without EDA’s approval are made at the 

Recipient’s risk of non-payment of costs, 

suspension, termination or other 

applicable EDA action with respect to 

the Investment. 

§ 302.8 Pre-approval Investment 

Assistance costs. 

Project activities carried out before 

approval of Investment Assistance shall 

be carried out at the sole risk of the 

Eligible Applicant. Such activity is 

subject to the rejection of the 

application, the disallowance of costs, 

or other adverse consequences as a 

result of non-compliance with EDA or 

Federal requirements, including but not 

limited to procurement requirements, 

civil rights requirements, Federal labor 

standards, or Federal environmental, 

historic preservation and related 

requirements. 

§ 302.9 Inter-governmental review of 

projects. 

(a) When an Eligible Applicant is not 

a State, Indian Tribe or other general 

purpose governmental authority, the 

Eligible Applicant must afford the 

appropriate general purpose local 

governmental authority (the 

‘‘Authority’’) in the Region a minimum 

of fifteen (15) days to review and 

comment on a proposed Project under 

EDA’s Public Works and Economic 

Development program or a proposed 

construction Project or RLF Grant under 

EDA’s Economic Adjustment Assistance 

program. Under these programs, Eligible 

Applicants shall furnish the following 

with their applications: If no comments 

are received from the Authority, a 

statement of efforts made to obtain such 

comments; or, if comments are received 

from the Authority, a copy of the 

comments and a statement of any 

actions taken to address such 

comments. 

(b) As required by 15 CFR part 13 and 

Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ as amended, if a State has 

adopted a process under Executive 

Order 12372 to review and coordinate 

proposed Federal financial assistance 

and direct Federal development 

(commonly referred to as the ‘‘single 

point of contact review process’’), all 

Eligible Applicants must also give State 

and local governments a reasonable 

opportunity to review and comment on 

the proposed Project, including review 

and comment from area-wide planning 

organizations in metropolitan areas, as 

provided for in 15 CFR part 13. 

§ 302.10 Attorneys’ and consultants’ fees; 

employment of expediters and 

administrative employees. 

(a) General. Investment Assistance 

awarded under PWEDA shall not 

directly or indirectly reimburse any 

attorneys’ or consultants’ fees incurred 

in connection with obtaining 

Investment Assistance and contracts 

under PWEDA. 

(b) Employment of expediters and 

administrative employees. Investment 

Assistance under PWEDA shall not be 

awarded to any Eligible Applicant, 

unless the owners, partners or officers of 

the Eligible Applicant: 

(1) Certify to EDA the names of any 

attorneys, agents and other persons 

engaged by or on behalf of the Eligible 

Applicant for the purpose of expediting 

applications made to EDA in connection 

with obtaining Investment Assistance 

under PWEDA and the fees paid or to 

be paid to the person for expediting the 

applications; and 

(2) Upon EDA’s request, execute an 

agreement binding the Eligible 

Applicant, for the two-year (2) period 

beginning on the date on which the 

Investment Assistance is awarded to the 

Eligible Applicant, to refrain from 

employing, offering any office or 

employment to or retaining for 

professional services any person who, 

on the date on which the Investment 

Assistance is awarded or within the 

one-year (1) period ending on that date: 

(i) Served as an officer, attorney, agent 

or employee of the Department; and 

(ii) Occupied a position or engaged in 

activities that the Assistant Secretary 

determines involved discretion with 

respect to the award of Investment 

Assistance under PWEDA. 

§ 302.11 Economic development 

information clearinghouse. 

Pursuant to section 502 of PWEDA, 

EDA maintains an economic 

development information clearinghouse 

on its Internet Web site at http:// 

www.eda.gov. 

§ 302.12 Project administration, operation 

and maintenance. 

EDA shall approve Investment 

Assistance awards only if, as 

determined in its sole discretion, the 

Project for which such Investment 

Assistance is awarded will be properly 

and efficiently administered, operated 

and maintained. 

§ 302.13 Maintenance of standards. 

All laborers and mechanics employed 

by contractors or subcontractors on 

Projects receiving Investment Assistance 

under PWEDA shall be paid wages at 

rates not less than those prevailing on 

similar construction in the locality, as 

determined by the U.S. Secretary of 

Labor in accordance with subchapter IV 

of chapter 31 of title 40, United States 

Code. EDA shall not extend any 

Investment Assistance under this 

chapter for a Project without first 

obtaining adequate assurance that these 

labor standards will be maintained upon 

the construction work. The U.S. 

Secretary of Labor shall have, with 

respect to the labor standards specified 

in this provision, the authority and 

functions set forth in Reorganization 

Plan No. 14 of 1950 (15 FR 3176 (May 

25, 1950); 64 Stat. 1267) and section 

3145 of title 40, United States Code. 

§ 302.14 Records and audits. 

(a) Records. Recipients of Investment 

Assistance under PWEDA shall keep 

such records as EDA shall require, 

including records that fully disclose: 

(1) The amount and the disposition by 

the Recipient of the proceeds of the 

awarded Investment Assistance; 

(2) The total cost of the Project that 

the Investment Assistance funds; 

(3) The amount and nature of the 

portion of Project costs provided by 

other sources; and 

(4) Such other records as EDA 

determines will facilitate an effective 

audit. 

(b) Audits. The Recipient shall permit 

the Assistant Secretary, the Inspector 

General of the Department, the 

Comptroller General of the United 

States and/or any of their respective 

agents or representatives access to its 

properties in order to examine all books, 

correspondence, and records, including 

without limitation computer programs 

and data processing software, to verify 

the Recipient’s compliance with 

Investment Assistance requirements. 

§ 302.15 Acceptance of certifications by 

Eligible Applicants. 

EDA will accept an Eligible 

Applicant’s certifications, accompanied 

by evidence satisfactory to EDA, that the 

Eligible Applicant meets the 

requirements for receiving Investment 

Assistance. 

§ 302.16 Reports by Recipients. 

(a) In general, each Recipient must 

submit reports to EDA at intervals and 

in the manner that EDA shall require, 

except that EDA shall not require any 

report to be submitted more than ten 

(10) years after the date of closeout of 

the Investment Assistance. 

(b) Each report must contain a dataspecific evaluation of the effectiveness 

of the Investment Assistance provided 

in fulfilling the Project’s purpose 

(including alleviation of economic 

distress) and in meeting the objectives 


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of PWEDA. Data used by a Recipient in 

preparing reports shall be accurate and 

verifiable as determined by EDA, and 

from independent sources (whenever 

possible). EDA will use this data and 

report to fulfill its performance 

measurement reporting requirements 

under the Government Performance and 

Results Act of 1993 and to monitor 

internal, Investment and Project 

performance through an internal 

performance measurement system, such 

as the EDA Balanced Scorecard or other 

system. 

(c) To enable EDA to determine the 

economic development effect of Projects 

that provide service benefits, EDA may 

require that Recipients submit a Project 

service map and information from 

which to determine whether services are 

provided to all segments of the Region 

being assisted. 

§ 302.17 Conflicts of interest. 

(a) General. It is EDA’s and the 

Department’s policy to maintain the 

highest standards of conduct to prevent 

conflicts of interest in connection with 

the award of Investment Assistance or 

its use for reimbursement or payment of 

costs (e.g., procurement of goods or 

services) by or to the Recipient. A 

conflict of interest generally exists when 

an Interested Party participates in a 

matter that has a direct and predictable 

effect on the Interested Party’s personal 

or financial interests. A conflict may 

also exist where there is an appearance 

that an Interested Party’s objectivity in 

performing his or her responsibilities 

under the Project is impaired. For 

example, an appearance of impairment 

of objectivity may result from an 

organizational conflict where, because 

of other activities or relationships with 

other persons or entities, an Interested 

Party is unable to render impartial 

assistance, services or advice to the 

Recipient, a participant in the Project or 

to the Federal government. 

Additionally, a conflict of interest may 

result from non-financial gain to an 

Interested Party, such as benefit to 

reputation or prestige in a professional 

field. 

(b) Prohibition on direct or indirect 

financial or personal benefits. 

(1) An Interested Party shall not 

receive any direct or indirect, financial 

or personal benefits in connection with 

the award of Investment Assistance or 

its use for payment or reimbursement of 

costs by or to the Recipient. Recipients 

shall establish safeguards to prohibit an 

Interested Party from using its position 

for a purpose that constitutes or 

presents the appearance of personal or 

organizational conflicts of interest or of 

personal gain. See also 15 CFR 14.42 

and 24.36(b)(3); Forms SF–424B and 

SF–424D. 

(2) An Interested Party shall also not, 

directly or indirectly, solicit or accept 

any gift, gratuity, favor, entertainment or 

other benefit having monetary value, for 

himself or herself or for another person 

or entity, from any person or 

organization which has obtained or 

seeks to obtain Investment Assistance 

from EDA. 

(3) Costs incurred in violation of any 

conflicts of interest rules contained in 

this chapter or in violation of any 

assurances by the Recipient may be 

denied reimbursement. 

(4) See § 315.15 of this chapter for 

special conflicts of interest rules for 

Trade Adjustment Assistance 

Investments. 

(c) Special rules for Revolving Loan 

Fund (‘‘RLF’’) Grants. In addition to the 

rules set forth in this section: 

(1) An Interested Party of a Recipient 

of an RLF Grant shall not receive, 

directly or indirectly, any personal or 

financial benefits resulting from the 

disbursement of RLF loans; 

(2) A Recipient of an RLF Grant shall 

also not lend RLF funds to an Interested 

Party; and 

(3) Former board members of a 

Recipient of an RLF Grant and members 

of his or her Immediate Family shall not 

receive a loan from such RLF for a 

period of two (2) years from the date 

that the board member last served on 

the RLF’s board of directors. 

§ 302.18 Post-approval requirements. 

(a) General. A Recipient must comply 

with all financial, performance, progress 

report and other requirements set forth 

in the terms and conditions of the 

Investment Assistance, including any 

special terms and applicable Federal 

cost principles (collectively, ‘‘PostApproval Requirements’’). A Recipient’s 

failure to comply with Post-Approval 

Requirements may result in the 

disallowance of costs, termination of the 

Investment Assistance award, or other 

adverse consequences to the Recipient. 

(b) Part 307 (Economic Adjustment 

Assistance Investments). Recipients of 

Economic Adjustment Assistance 

Investments under part 307 of this 

chapter must comply with the PostApproval Requirements set forth in 

§ 307.6 of this chapter. 

§ 302.19 Indemnification. 

To the maximum extent permitted by 

law, a Recipient shall indemnify and 

hold EDA harmless from any liability 

that EDA may incur due to the actions 

or omissions of the Recipient. 

§ 302.20 Civil rights. 

(a) Discrimination is prohibited by a 

Recipient or Other Party (as defined in 

paragraph (b) of this section) with 

respect to a Project receiving Investment 

Assistance under PWEDA or by an 

entity receiving Adjustment Assistance 

(as defined in § 315.2 of this chapter) 

under the Trade Act, in accordance with 

the following authorities: 

(1) Section 601 of Title VI of the Civil 

Rights Act of 1964, as amended (42 

U.S.C. 2000d et seq.) (proscribing 

discrimination on the basis of race, 

color, or national origin), and the 

Department’s implementing regulations 

found at 15 CFR part 8; 

(2) 42 U.S.C. 3123 (proscribing 

discrimination on the basis of sex in 

Investment Assistance provided under 

PWEDA) and 42 U.S.C. 6709 

(proscribing discrimination on the basis 

of sex under the Local Public Works 

Program), and the Department’s 

implementing regulations found at 15 

CFR 8.7 through 8.15; 

(3) Section 504 of the Rehabilitation 

Act of 1973, as amended (29 U.S.C. 794) 

(proscribing discrimination on the basis 

of disabilities), and the Department’s 

implementing regulations found at 15 

CFR part 8b; 

(4) The Age Discrimination Act of 

1975, as amended (42 U.S.C. 6101 et 

seq.) (proscribing discrimination on the 

basis of age), and the Department’s 

implementing regulations found at 15 

CFR part 20; and 

(5) Other Federal statutes, regulations 

and Executive Orders, as applicable. 

(b) Definitions. (1) For purposes of 

this section, an ‘‘Other Party’’ means an 

‘‘other party subject to this part,’’ as 

defined in 15 CFR 8.3(l), and includes 

an entity which (or which is intended 

to) creates and/or saves fifteen (15) or 

more permanent jobs as a result of 

Investment Assistance; provided that 

such entity is also either specifically 

named in the application as benefiting 

from the Project, or is or will be located 

in an EDA building, port, facility, or 

industrial, commercial or business park 

constructed or improved in whole or in 

part with Investment Assistance prior to 

EDA’s final disbursement of Investment 

Assistance funds. 

(2) Additional applicable definitions 

are provided in 15 CFR part 8. 

(c) No Recipient or Other Party shall 

intimidate, threaten, coerce or 

discriminate against any person for the 

purpose of interfering with any right or 

privilege secured by 42 U.S.C. 3123 or 

42 U.S.C. 6709, or because the person 

has made a complaint, testified, assisted 

or participated in any manner in an 

investigation, proceeding or hearing 

under this section. 


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(d) All Recipients of Investment 

Assistance under PWEDA, all Other 

Parties and all entities receiving 

Adjustment Assistance under the Trade 

Act must submit to EDA written 

assurances that they will comply with 

applicable laws, EDA regulations, 

Department regulations, and such other 

requirements as may be applicable, 

prohibiting discrimination. 

(e) Reporting and other procedural 

matters are set forth in 15 CFR parts 8, 

8a, 8b, 8c and 20. 

PART 303—PLANNING INVESTMENTS 

AND COMPREHENSIVE ECONOMIC 

DEVELOPMENT STRATEGIES 

Sec. 

303.1 Purpose and scope. 

303.2 Definitions. 

303.3 Application requirements and 

evaluation criteria. 

303.4 Award requirements. 

303.5 Eligible administrative expenses. 

303.6 EDA-funded CEDS process. 

303.7 Requirements for Comprehensive 

Economic Development Strategies. 

303.8 Requirements for State plans. 

303.9 Requirements for short-term Planning 

Investments. 

Authority: 42 U.S.C. 3143; 42 U.S.C. 3162; 

42 U.S.C. 3174; 42 U.S.C. 3211; Department 

of Commerce Organization Order 10–4. 

§ 303.1 Purpose and scope. 

The purpose of EDA Planning 

Investments is to provide support to 

Planning Organizations for the 

development, implementation, revision 

or replacement of Comprehensive 

Economic Development Strategies, and 

for related short-term Planning 

Investments and State plans designed to 

create and retain higher-skill, higherwage jobs, particularly for the 

unemployed and underemployed in the 

nation’s most economically distressed 

Regions. EDA’s Planning Investments 

support partnerships with District 

Organizations, Indian Tribes, 

community development corporations, 

non-profit regional planning 

organizations and other Eligible 

Recipients. Planning activities 

supported by these Investments must be 

part of a continuous process involving 

the active participation of Private Sector 

Representatives, public officials and 

private citizens, and include: 

(a) Analyzing local economies; 

(b) Defining economic development 

goals; 

(c) Determining Project opportunities; 

and 

(d) Formulating and implementing an 

economic development program that 

includes systematic efforts to reduce 

unemployment and increase incomes. 

§ 303.2 Definitions. 

In addition to the defined terms set 

forth in § 300.3 of this chapter, the 

following terms used in this part shall 

have the following meanings: 

Planning Investment means the award 

of EDA Investment Assistance under 

section 203 of PWEDA and this part. 

Planning Organization means a 

Recipient whose purpose is to develop 

and implement a CEDS for a specific 

EDA-approved Region under section 

203 of PWEDA. 

Strategy Committee means the 

committee or other entity identified by 

the Planning Organization as 

responsible for the development, 

implementation, revision or 

replacement of the CEDS for the 

Planning Organization. 

§ 303.3 Application requirements and 

evaluation criteria. 

(a) For Planning Investment awards, 

EDA uses the general application 

evaluation criteria set forth in § 301.8 of 

this chapter. In addition, applications 

for Planning Investments must include 

information about the following: 

(1) The proposed scope of work for 

the development, implementation, 

revision or replacement of the CEDS, or 

the relation of the CEDS to the proposed 

short-term planning activities or the 

State plan; 

(2) Qualifications of the Eligible 

Applicant to implement the goals and 

objectives resulting from the CEDS, 

short-term planning activities or the 

State plan; 

(3) The involvement of the Region’s 

business leadership at each stage of the 

preparation of the CEDS, short-term 

planning activities or State plan; 

(4) Extent of broad-based 

representation and involvement of the 

Region’s civic, business, labor, minority 

and other interests in the Eligible 

Applicant’s economic development 

activities; and 

(5) Feasibility of the proposed scope 

of work to create and retain higher-skill, 

higher-wage jobs through 

implementation of the CEDS. 

(b) In addition to the criteria set forth 

in paragraph (a) of this section, funded 

Recipients are evaluated on the basis of 

the extent of continuing economic 

distress within the Region, their past 

performance, and the overall 

effectiveness of their CEDS. 

(c) For Planning Investment awards to 

a State, the Assistant Secretary shall 

also consider the extent to which the 

State will integrate and coordinate its 

CEDS with local and Economic 

Development District plans. 

(d) The Investment Rates for Planning 

Investments will be determined in 

accordance with § 301.4 of this chapter. 

§ 303.4 Award requirements. 

(a) Planning Investments shall 

function in conjunction with any other 

available Federal, State or local 

planning assistance to ensure adequate 

and effective planning and economical 

use of funds. 

(b) Except in compelling 

circumstances as determined by the 

Assistant Secretary, EDA will not 

provide Planning Investments for 

multiple CEDS that address the needs of 

an identical or substantially similar 

Region. 

(c) EDA will provide a Planning 

Investment for the period of time 

required to develop, revise or replace, 

and implement a CEDS, generally in 

thirty-six (36) month renewable 

Investment award periods. 

§ 303.5 Eligible administrative expenses. 

In accordance with applicable Federal 

cost principles, Planning Investments 

may be used to pay the direct and 

indirect costs incurred by a Planning 

Organization in the development, 

implementation, revision or 

replacement of a CEDS and for related 

short-term planning activities. 

§ 303.6 EDA-funded CEDS process. 

If EDA awards Investment Assistance 

to a Planning Organization to develop, 

revise or replace a CEDS, the Planning 

Organization must follow the 

procedures set forth in this section: 

(a) The Planning Organization must 

appoint a Strategy Committee. The 

Strategy Committee must represent the 

main economic interests of the Region 

and must include Private Sector 

Representatives as a majority of its 

membership. In addition, the Planning 

Organization should ensure that the 

Strategy Committee includes public 

officials, community leaders, 

representatives of workforce 

development boards, institutions of 

higher education, minority and labor 

groups, and private individuals. The 

Strategy Committee representing Indian 

Tribes or States may vary. 

(b) The Planning Organization must 

develop and submit to EDA a CEDS that: 

(1) Complies with the requirements of 

§ 303.7; and 

(2) Was made available for review and 

comment by the public for a period of 

at least thirty (30) days prior to 

submission to EDA. 

(c)(1) After obtaining EDA approval of 

the CEDS, the Planning Organization 

must submit annually an updated CEDS 

performance report to EDA. 

(2) The Planning Organization must 

submit a new or revised CEDS to EDA 

at least every five (5) years, unless EDA 

or the Planning Organization determines 


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that a new or revised CEDS is required 

earlier due to changed circumstances. 

(3) Any updated CEDS performance 

report that results in a change of the 

requirements set forth in § 303.7(b)(3) of 

the EDA-accepted CEDS or any new or 

revised CEDS, must be available for 

review and comment by the public in 

accordance with paragraph (b)(2) of this 

section. 

(d) If EDA determines that 

implementation of the CEDS is 

inadequate, it will notify the Planning 

Organization in writing and the 

Planning Organization shall submit to 

EDA a new or revised CEDS. 

(e) If any part of a Region is covered 

by one or more of the Regional 

Commissions as set forth in section 404 

of PWEDA, the Planning Organization 

shall ensure that a copy of the CEDS is 

provided to the Regional 

Commission(s). 

§ 303.7 Requirements for Comprehensive 

Economic Development Strategies. 

(a) General. CEDS are designed to 

bring together the public and private 

sectors in the creation of an economic 

roadmap to diversify and strengthen 

Regional economies. The CEDS should 

analyze the Regional economy and serve 

as a guide for establishing Regional 

goals and objectives, developing and 

implementing a Regional plan of action, 

and identifying investment priorities 

and funding sources. Public and private 

sector partnerships are critical to the 

implementation of the integral elements 

of a CEDS set forth in paragraph (b) of 

this section. As a performance-based 

plan, the CEDS will serve a critical role 

in a Region’s efforts to defend against 

economic dislocations due to global 

trade, competition and other events 

resulting in the loss of jobs and private 

investment. 

(b) Technical requirements. A CEDS 

must be the result of a continuing 

economic development planning 

process, developed with broad-based 

and diverse public and private sector 

participation, and shall contain the 

following: 

(1) A background of the economic 

development situation of the Region 

with a discussion of the economy, 

population, geography, workforce 

development and use, transportation 

access, resources, environment and 

other pertinent information; 

(2) An in-depth analysis of economic 

and community development problems 

and opportunities, including: 

(i) Incorporation of relevant material 

from other government-sponsored or 

supported plans and consistency with 

applicable State and local workforce 

investment strategies; and 

(ii) An identification of past, present 

and projected future economic 

development investments in the Region 

covered; 

(3) A section setting forth goals and 

objectives necessary to solve the 

economic development problems of the 

Region; 

(4) A discussion of community and 

private sector participation in the CEDS 

effort; 

(5) A section listing all suggested 

Projects and the projected numbers of 

jobs to be created as a result thereof; 

(6) A section identifying and 

prioritizing vital Projects, programs and 

activities that address the Region’s 

greatest needs or that will best enhance 

the Region’s competitiveness, including 

sources of funding for past and potential 

future Investments; 

(7) A section identifying economic 

clusters within the Region, focusing on 

those that are growing or in decline; 

(8) A plan of action to implement the 

goals and objectives of the CEDS, 

including: 

(i) Promoting economic development 

and opportunity; 

(ii) Fostering effective transportation 

access; 

(iii) Enhancing and protecting the 

environment; 

(iv) Maximizing effective 

development and use of the workforce 

consistent with any applicable State or 

local workforce investment strategy; 

(v) Promoting the use of technology in 

economic development, including 

access to high-speed 

telecommunications; 

(vi) Balancing resources through 

sound management of physical 

development; and 

(vii) Obtaining and utilizing adequate 

funds and other resources; and 

(9) A list of performance measures 

used to evaluate the Planning 

Organization’s successful development 

and implementation of the CEDS, 

including but not limited to the 

following: 

(i) Number of jobs created after 

implementation of the CEDS; 

(ii) Number and types of investments 

undertaken in the Region; 

(iii) Number of jobs retained in the 

Region; 

(iv) Amount of private sector 

investment in the Region after 

implementation of the CEDS; and 

(v) Changes in the economic 

environment of the Region; and 

(10) A section outlining the 

methodology for cooperating and 

integrating the CEDS with a State’s 

economic development priorities. 

(c) Consideration of non-EDA funded 

CEDS. 

(1) In determining the acceptability of 

a CEDS prepared independently of EDA 

Investment Assistance or oversight for 

Projects under parts 305 and 307 of this 

chapter, EDA may in its discretion 

determine that the CEDS is acceptable 

without fulfilling all the requirements of 

paragraph (b) of this section. In doing 

so, EDA shall consider the 

circumstances surrounding the 

application for Investment Assistance, 

including emergencies or natural 

disasters and the fulfillment of the 

requirements of section 302 of PWEDA. 

(2) If the CEDS for a Project under 

parts 305 and 307 of this chapter is 

developed under another federallysupported program, it must include 

acceptable performance measures 

similar to those set forth in paragraph 

(b) of this section and information on 

the state of the Regional economy. To 

the maximum extent practicable, the 

CEDS shall be consistent and 

coordinated with any existing economic 

development plan for the Region. 

§ 303.8 Requirements for State plans. 

(a) As a condition of a State receiving 

a Planning Investment: 

(1) The State must have or develop a 

CEDS that meets the requirements of 

§ 303.7; 

(2) Any State plan developed with 

Planning Investment Assistance must, to 

the maximum extent practicable, be 

developed cooperatively by the State, 

political subdivisions of the State, and 

the Economic Development Districts 

located wholly or partially in the State; 

and 

(3) The State must submit to EDA an 

annual report on any State plan 

receiving Planning Investment 

Assistance. 

(b) Before awarding a Planning 

Investment to a State, EDA shall 

consider the extent to which the State 

will take into account local and District 

economic development plans. 

§ 303.9 Requirements for short-term 

Planning Investments. 

(a) In addition to providing support 

for CEDS and State plans, EDA may also 

provide Investment Assistance to 

support short-term planning activities. 

EDA may provide such Investment 

Assistance to: 

(1) Develop the economic 

development planning capacity of 

States, cities and other Eligible 

Applicants experiencing economic 

distress; 

(2) Assist in institutional capacity 

building; or 

(3) Undertake innovative approaches 

to economic development. 

(b) Eligible activities may include but 

are not limited to updating a portion of 


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a CEDS, economic analysis, 

development of economic development 

policies and procedures, and 

development of economic development 

goals. 

(c) Applicants for short-term Planning 

Investments must provide performance 

measures acceptable to EDA that can be 

used to evaluate the success of the 

program and provide EDA with progress 

reports during the term of the Planning 

Investment, as set forth in the 

Investment agreement. 

PART 304—ECONOMIC 

DEVELOPMENT DISTRICTS 

Sec. 

304.1 Designation of Economic 

Development Districts: Regional 

eligibility. 

304.2 District Organizations: Formation, 

organizational requirements and 

operations. 

304.3 District modification and termination. 

304.4 Performance evaluations. 

Authority: 42 U.S.C. 3122; 42 U.S.C. 3171; 

42 U.S.C. 3172; 42 U.S.C. 3196; Department 

of Commerce Organization Order 10–4. 

§ 304.1 Designation of Economic 

Development Districts: Regional eligibility. 

Upon the request of a District 

Organization (as defined in § 304.2), 

EDA may designate a Region as an 

Economic Development District if such 

Region: 

(a) Contains at least one (1) 

geographic area that is subject to the 

economic distress criteria set forth in 

§ 301.3(a)(1) of this chapter and is 

identified in an approved CEDS; 

(b) Is of sufficient size or population 

and contains sufficient resources to 

foster economic development on a scale 

involving more than a single geographic 

area subject to the economic distress 

criteria set forth in § 301.3(a)(1) of this 

chapter; 

(c) Has an EDA-approved CEDS that 

(1) Meets the requirements under 

§ 303.7 of this chapter; 

(2) Contains a specific program for 

intra-District cooperation, self-help, and 

public investment; and 

(3) Is approved by each affected State 

and by the Assistant Secretary; 

(d) Obtains commitments from at least 

a majority of the counties or other areas 

within the proposed District, as 

determined by EDA, to support the 

economic development activities of the 

District; and 

(e) Obtains the concurrence with the 

designation request from the State (or 

States) in which the proposed District 

will be wholly or partially located. 

§ 304.2 District Organizations: Formation, 

organizational requirements and 

operations. 

(a) General. A ‘‘District Organization’’

is an entity that satisfies the formation 

and organizational requirements under 

paragraphs (b) and (c) of this section. 

(b) Formation. A District Organization 

must be organized as one of the 

following: 

(1) A public organization formed 

through an inter-governmental 

agreement providing for the joint 

exercise of local government powers; or 

(2) A public organization established 

under State-enabling legislation for the 

creation of multi-jurisdictional areawide planning organizations; or 

(3) A non-profit organization 

incorporated under the applicable nonprofit statutes of the State in which it is 

incorporated. 

(c) Organization and governance. 

(1) Each District Organization must 

meet the requirements of this paragraph 

(c) concerning membership 

composition, the maintenance of 

adequate staff support to perform its 

economic development functions, and 

its authorities and responsibilities for 

carrying out economic development 

functions. The District Organization’s 

board of directors (or other governing 

body) must also meet these 

requirements. 

(2) The District Organization must 

demonstrate that its governing body is 

broadly representative of the principal 

economic interests of the Region, and, 

unless otherwise prohibited by 

applicable State or local law, must 

include at least one (1) Private Sector 

Representative and one (1) or more of 

the following: Executive Directors of 

Chambers of Commerce, or 

representatives of institutions of postsecondary education, workforce 

development groups or labor groups, all 

of which must comprise in the aggregate 

a minimum of thirty-five (35) percent of 

the District Organization’s governing 

body. The governing body shall also 

have at least a simple majority of its 

membership who are elected officials 

and/or employees of a general purpose 

unit of State, local or Indian tribal 

government who have been appointed 

to represent the government. Upon the 

District Organization’s showing of its 

inability to locate a Private Sector 

Representative to serve on its governing 

body following extensive due diligence, 

the Assistant Secretary may waive the 

Private Sector Representative 

requirement. The Assistant Secretary 

shall not delegate the authority to grant 

a waiver under this paragraph. 

(3) The District Organization must be 

assisted by a professional staff drawn 

from qualified persons in economic 

development, planning, business 

development or related disciplines. 

(4) The governing bodies of District 

Organizations must provide access for 

persons who are not members to make 

their views known concerning ongoing 

and proposed District activities in 

accordance with the following 

requirements: 

(i) The District Organization must 

hold meetings open to the public at least 

once a year and shall also publish the 

date and agenda of such meetings 

sufficiently in advance to allow the 

public a reasonable time to prepare in 

order to participate effectively. 

(ii) The District Organization shall 

adopt a system of parliamentary 

procedures to assure that board 

members and others have access to an 

effective opportunity to participate in 

the affairs of the District. 

(iii) The District Organization shall 

provide information sufficiently in 

advance of decisions to give the public 

adequate opportunity to review and 

react to proposals. District 

Organizations should communicate 

technical data and other material to the 

public so they may understand the 

impact of public programs, available 

options and alternative decisions. 

(iv) The District Organization must 

make available to the public such 

audited statements, annual budgets and 

minutes of public meetings, as may be 

reasonably requested. 

(v) The District Organization and its 

board of directors must comply with all 

Federal and State financial assistance 

reporting requirements and the conflicts 

of interest provisions set forth in 

§ 302.17 of this chapter. 

(d) Operations. (1) The District 

Organization shall engage in the full 

range of economic development 

activities listed in its EDA-approved 

CEDS. These activities may include: 

(i) Coordinating and implementing 

economic development activities in the 

District; 

(ii) Carrying out economic 

development research, planning, 

implementation and advisory functions 

identified in the CEDS; and 

(iii) Coordinating the development 

and implementation of the CEDS with 

other local, State, Federal and private 

organizations. 

(2) The District Organization may at 

its option contract for services to 

accomplish the activities listed in 

paragraphs (d)(1)(i) through (iii) of this 

section. 

§ 304.3 District modification and 

termination. 

(a) Modification. Upon the request of 

a District Organization and with the 


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concurrence of the State or States 

affected (unless such concurrence is 

waived by the Assistant Secretary), EDA 

may modify the geographic boundaries 

of a District, if it determines that such 

modification will contribute to a more 

effective program for economic 

development. 

(b) Termination. EDA may, upon sixty 

(60) days prior written notice to the 

District Organization, member counties 

and other areas determined by EDA and 

each affected State, terminate a Region’s 

designation as an Economic 

Development District when: 

(1) A District or District Organization 

no longer meets the requirements of 

§§ 304.1 or 304.2; or 

(2) EDA determines that the District 

Organization fails to execute its CEDS 

according to the development, 

implementation and other performance 

measures set forth therein; or 

(3) A District Organization has 

requested termination. 

(c) Prior to terminating a District 

Organization under paragraph (b)(2) of 

this section, EDA will consult with the 

District Organization and consider all 

facts and circumstances regarding the 

District Organization’s operations. EDA 

will not terminate a District’s 

designation based on circumstances 

beyond the control of the District 

Organization (e.g., natural disaster, 

plant closure, overall economic 

downturn, sudden and severe economic 

dislocation, or other situation). 

(d) EDA may further modify or 

terminate a Region’s designation as a 

District according to the standards set 

forth in an FFO. 

§ 304.4 Performance evaluations. 

(a) EDA shall evaluate the 

management standards, financial 

accountability and program 

performance of each District 

Organization within three (3) years after 

the initial Investment award and at least 

once every three (3) years thereafter, so 

long as the District Organization 

continues to receive Investment 

Assistance. EDA’s evaluation shall 

assess: 

(1) The continuing Regional eligibility 

of the District, as set forth in § 304.1; 

(2) The management of the District 

Organization, as set forth in § 304.2; and 

(3) The implementation of the CEDS, 

including the District Organization’s 

performance and contribution towards 

the retention and creation of 

employment, as set forth in § 303.7 on 

this chapter. 

(b) For peer review, EDA shall ensure 

the participation of at least one (1) other 

District Organization in the performance 

evaluation on a cost-reimbursement 

basis. 

PART 305—PUBLIC WORKS AND 

ECONOMIC DEVELOPMENT 

INVESTMENTS 

Subpart A—General 

Sec. 

305.1 Purpose and scope. 

305.2 Award requirements. 

305.3 Application requirements. 

305.4 Projects for design and engineering 

work. 

Subpart B—Requirements for Approved 

Projects 

305.5 Project administration by District 

Organization. 

305.6 Allowable methods of procurement 

for construction services. 

305.7 Services performed by the Recipient’s 

own forces. 

305.8 Recipient-furnished equipment and 

materials. 

305.9 Project phasing and Investment 

disbursement. 

305.10 Bid underrun. 

305.11 Contract awards; early construction 

start. 

305.12 Project sign. 

305.13 Contract change orders. 

305.14 Occupancy prior to completion. 

Authority: 42 U.S.C. 3211; 42 U.S.C. 3141; 

Department of Commerce Organization Order 

10–4. 

Subpart A—General 

§ 305.1 Purpose and scope. 

Public Works and Economic 

Development Investments (‘‘Public 

Works Investments’’) intend to help the 

nation’s most distressed communities 

revitalize, expand and upgrade their 

physical infrastructure to attract new 

industry, encourage business expansion, 

diversify local economies and generate 

or retain long-term private sector jobs 

and investments. The primary goal of 

these Investments is the creation of new, 

or the retention of existing, long-term 

private sector job opportunities in 

communities experiencing significant 

economic distress as evidenced by 

chronic high unemployment, 

underemployment, low per capita 

income, outmigration, or a Special 

Need. These Investments also intend to 

assist communities in attracting private 

capital investment and higher-skill, 

higher-wage job opportunities and to 

promote the successful long-term 

economic recovery of a Region. 

§ 305.2 Award requirements. 

(a) Project scope. Public Works 

Investments may fund the following 

activities: 

(1) Acquisition or development of 

land and improvements for use in a 

public works, public service or other 

type of development facility; or 

(2) Acquisition, design and 

engineering, construction, 

rehabilitation, alteration, expansion, or 

improvement of such a facility, 

including related machinery and 

equipment. 

(b) Requirements. A Public Works 

Investment may be made if EDA 

determines that: 

(1) The Project will, directly or 

indirectly: 

(i) Improve the opportunities for the 

successful establishment or expansion 

of industrial or commercial plants or 

facilities in the Region where the Project 

is located; 

(ii) Assist in the creation of additional 

long-term employment opportunities in 

the Region; or 

(iii) Primarily benefit the long-term 

unemployed and members of lowincome families in the Region; 

(2) The Project will fulfill a pressing 

need of the Region, or a part of the 

Region, in which the Project is located; 

and 

(3) The Region in which the Project is 

located has a CEDS and the Project is 

consistent with the CEDS. 

(c) Not more than fifteen (15) percent 

of the annual appropriations made 

available to EDA to fund Public Works 

Investments may be made in any one (1) 

State. 

§ 305.3 Application requirements. 

(a) Each application for Public Works 

Investment Assistance must: 

(1) Include evidence of eligibility, as 

provided in part 301 of this chapter; 

(2) Include, or incorporate by 

reference, a CEDS (as provided in 

§ 303.7 of this chapter); 

(3) Demonstrate how the proposed 

Project meets the criteria of § 305.2; and 

(4) Demonstrate how the proposed 

Project meets the proposal evaluation 

criteria set forth in § 301.8 of this 

chapter. 

(b) The Investment Rate for Public 

Works Investments will be determined 

in accordance with § 301.4 of this 

chapter. 

§ 305.4 Projects for design and 

engineering work. 

In the case of Public Works 

Investment Assistance awarded solely 

for design and engineering work, the 

following additional application 

requirements and terms shall apply: 

(a) EDA may determine that a separate 

Investment for design and engineering is 

warranted due to the technical 

complexity or environmental sensitivity 

of the construction Project; 

(b) The purpose of the Investment 

may be limited to the development and 


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production of all documents required 

for the construction of the proposed 

construction Project in a format and in 

sufficient quantity to permit 

advertisement and award of a 

construction contract soon after 

securing construction financing for the 

Project; 

(c) EDA will not disburse any portion 

of the Investment Assistance until it 

receives and certifies compliance with 

the Investment award of all design and 

engineering contracts; and 

(d) EDA’s funding of the Project for 

design and engineering work does not in 

any way commit EDA to fund 

construction of the Project. 

Subpart B—Requirements for 

Approved Projects 

§ 305.5 Project administration by District 

Organization. 

(a) When a District Organization is not 

the Recipient or co-Recipient of 

Investment Assistance, the District 

Organization may administer the Project 

for the Recipient if EDA determines 

fulfillment of the following conditions: 

(1) The Recipient has requested 

(either in the application or by separate 

written request) that the District 

Organization for the Region in which 

the Project is located administer the 

Project; 

(2) The Recipient certifies and EDA 

finds that: 

(i) Administration of the Project is 

beyond the capacity of the Recipient’s 

current staff and would require hiring 

additional staff or contracting for such 

services; 

(ii) No local organization or business 

exists that could administer the Project 

in a more efficient or cost-effective 

manner than the staff of the District 

Organization; and 

(iii) The staff of the District 

Organization would administer the 

Project without sub-contracting the 

work; and 

(3) The allowable costs for the 

administration of the Project by the 

District Organization’s staff will not 

exceed the amount that would be 

allowable to the Recipient. 

(b) EDA must approve the request 

either by approving the application in 

which the request is made or by 

separate specific written approval. 

§ 305.6 Allowable methods of procurement 

for construction services. 

(a) Recipients may use alternate 

construction procurement methods to 

the traditional design/bid/build 

procedures (including lump sum or unit 

price-type construction contracts). 

These methods include but are not 

limited to design/bid/build, 

construction management at risk and 

force account. If an alternate method is 

used, the Recipient shall submit to EDA 

for approval a construction services 

procurement plan and the Recipient 

must use a design professional to 

oversee the process. The Recipient shall 

submit the plan to EDA prior to 

advertisement for bids and shall include 

the following, as applicable: 

(1) Justification for the proposed 

method for procurement of construction 

services; 

(2) The scope of work with cost 

estimates and schedules; 

(3) A copy of the proposed 

construction contract; 

(4) The name and qualifications of the 

selected design professional; and 

(5) Procedures to be used to ensure 

full and open competition, including 

the selection criteria. 

(b) For all procurement methods, the 

Recipient must comply with the 

procurement standards set forth in 15 

CFR parts 14 or 24, as applicable. 

§ 305.7 Services performed by the 

Recipient’s own forces. 

In certain circumstances, the 

Recipient may wish to consider having 

a portion or all of the design, 

construction, inspection, legal services 

or other work and/or services in 

connection with the Project performed 

by personnel who are employed by the 

Recipient either full-time or part-time. 

EDA may approve the use of such ‘‘inhouse forces’’ if: 

(a) The services are routinely 

performed by the Recipient for all 

construction Projects performed by the 

Recipient (for example, inspection or 

legal); or 

(b) The Recipient has a special skill 

required for the construction of the 

Project (for example, construction of 

unique Indian structures); or 

(c) The Recipient has made all 

reasonable efforts to obtain a contractor 

but has failed to do so because of 

uncontrollable factors such as the 

remoteness of the Project site or an 

overabundance of construction work in 

the Region; or 

(d) The Recipient demonstrates 

substantial cost savings. 

§ 305.8 Recipient-furnished equipment and 

materials. 

The Recipient may wish to 

incorporate into the Project equipment 

or materials that it will secure through 

its own efforts, subject to the following 

requirements: 

(a) EDA must approve any use of 

Recipient-furnished equipment and 

materials. EDA may require that major 

equipment items be subject to a lien in 

favor of EDA and may also require a 

statement from the Recipient regarding 

expected useful life and salvage value of 

such equipment; 

(b) EDA may require the Recipient to 

establish that the expense claimed for 

such equipment or materials is 

competitive with current local market 

costs; and 

(c) Acquisition of Recipient-furnished 

equipment and/or materials under this 

section is also subject to the 

requirements of 15 CFR parts 14 or 24, 

as applicable. 

§ 305.9 Project phasing and Investment 

disbursement. 

(a) EDA may authorize in advance the 

award of construction contracts in 

phases, provided the Recipient submits 

a request that includes each of the 

following: 

(1) Valid reasons justifying why the 

Project must be phased; 

(2) Description of the specific 

elements to be completed in each phase; 

(3) Detailed construction cost 

estimates for each phase; 

(4) Time schedules for completing all 

phases of the Project; 

(5) Certification that the Recipient can 

and will fund any overrun(s); and 

(6) Certification that the Recipient is 

capable of paying incurred costs prior to 

the first disbursement of EDA funds. 

(b) EDA will begin disbursement of 

funds after receipt of evidence sufficient 

to EDA of compliance with all 

Investment award conditions. EDA may 

approve the disbursement of funds prior 

to the tender of all construction 

contracts if the Recipient can 

demonstrate to EDA’s satisfaction that a 

severe financial hardship will result 

without such approval. 

§ 305.10 Bid underrun. 

If at the construction contract bid 

opening, the lowest responsive bid is 

less than the total Project cost, the 

Recipient will notify EDA to determine 

whether Investment funds should be 

deobligated from the Project. 

§ 305.11 Contract awards; early 

construction start. 

EDA must determine that the award of 

all contracts necessary for design and 

construction of the Project facilities is in 

compliance with the terms and 

conditions of the Investment award in 

order for the costs to be eligible for EDA 

reimbursement. Pending this 

determination, the Recipient may issue 

a notice permitting construction under 

the contract to commence. If 

construction commences prior to EDA’s 

determination, the Recipient proceeds at 


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its own risk until EDA review and 

concurrence. The EDA regional office 

will advise the Recipient of the 

requirements necessary to obtain EDA’s 

determination. 

§ 305.12 Project sign. 

The Recipient shall be responsible for 

the construction, erection and 

maintenance in good condition 

throughout the construction period of a 

sign or signs at a conspicuous place at 

the Project site indicating that the 

Federal government is participating in 

the Project. The EDA regional office will 

provide mandatory specifications for the 

signage. 

§ 305.13 Contract change orders. 

(a) If it becomes necessary to alter the 

construction contracts post-execution, 

the Recipient and contractor shall agree 

to a formal contract change order. 

(b) All contract change orders must 

receive EDA review for compliance with 

the terms and conditions of the 

Investment award, even if the Recipient 

is to pay for all additional costs 

resulting from the change or the change 

order reduces the contract price. 

(c) Work on the Project may continue 

pending EDA review of the contract 

change order, but all such work will be 

at the Recipient’s risk until EDA 

completes its review. 

§ 305.14 Occupancy prior to completion. 

Occupancy of any part of the Project 

prior to final acceptance is entirely at 

the Recipient’s risk and must follow the 

requirements of local and State law. 

PART 306—TRAINING, RESEARCH 

AND TECHNICAL ASSISTANCE 

INVESTMENTS 

Subpart A—Local and National Technical 

Assistance 

Sec. 

306.1 Purpose and scope. 

306.2 Award requirements. 

306.3 Application requirements. 

Subpart B—University Center Economic 

Development Program 

306.4 Purpose and scope. 

306.5 Award requirements. 

306.6 Application requirements. 

306.7 Performance evaluations of 

University Centers. 

Authority: 42 U.S.C. 3147; 42 U.S.C. 3196; 

42 U.S.C. 3211; Department of Commerce 

Organization Order 10–4. 

Subpart A—Local and National 

Technical Assistance 

§ 306.1 Purpose and scope. 

(a) Local and National Technical 

Assistance Investments may: 

(1) Determine the causes of excessive 

unemployment, underemployment, low 

per capita income, outmigration or other 

problems throughout the nation; 

(2) Formulate and implement 

economic development tools, models, 

and innovative techniques that will 

alleviate or prevent conditions of 

excessive unemployment or 

underemployment; 

(3) Formulate and implement 

economic development programs to 

increase local, regional and national 

capacity; 

(4) Evaluate the effectiveness and 

economic impact of programs, projects 

and techniques to alleviate economic 

distress and promote economic 

development; 

(5) Conduct project planning and 

feasibility studies; 

(6) Provide management and 

operational assistance; 

(7) Establish business outreach 

centers; 

(8) Disseminate information about 

effective programs, projects and 

techniques that alleviate conditions of 

economic distress and promote 

economic development; 

(9) Assess, market and establish 

business clusters and associations; or 

(10) Perform other activities 

determined by EDA to be appropriate 

under the Local and National Technical 

Assistance program. 

(b) Investment Assistance may not be 

used to start or expand a private 

business. 

(c) EDA may identify specific training, 

research or technical assistance Projects 

it will fund, which will be subject to 

competition. Ordinarily, these Projects 

are specified in an FFO, which will 

provide the specific requirements, 

timelines and the appropriate points of 

contact and addresses. 

(d) In providing Local and National 

Technical Assistance under this 

subpart, EDA, in addition to making 

Investments, may: 

(1) Provide Local and National 

Technical Assistance through officers or 

employees of the Department; 

(2) Pay funds made available to carry 

out this subpart to Federal Agencies; or 

(3) Employ private individuals, 

partnerships, businesses, corporations, 

or appropriate institutions under 

contracts entered into for this purpose. 

§ 306.2 Award requirements. 

EDA selects Projects for Local and 

National Technical Assistance 

Investments in accordance with the 

general evaluation and selection criteria 

set forth in part 301 of this chapter and 

the extent to which the Project: 

(a) Strengthens the capacity of local, 

State or national organizations and 

institutions to undertake and promote 

effective economic development 

programs targeted to Regions of distress; 

(b) Benefits distressed Regions; 

(c) Demonstrates innovative 

approaches to stimulate economic 

development in distressed Regions; 

(d) Is consistent with an EDAapproved CEDS, as applicable, for the 

Region in which the Project is located; 

and 

(e) Meets the criteria outlined in the 

applicable FFO. 

§ 306.3 Application requirements. 

(a) EDA will provide Investment 

Assistance under this subpart for the 

period of time required to complete the 

Project’s scope of work, generally not to 

exceed twelve (12) to eighteen (18) 

months. 

(b) For a Project of significant 

Regional or national scope, EDA may 

waive the requirement set forth in 

§ 301.2(b) of this chapter that the nonprofit organization act in cooperation 

with officials of a political subdivision 

of a State. 

(c) The Investment Rate for 

Investments under this subpart shall be 

determined in accordance with 

§ 301.4(b)(4) of this chapter. 

Subpart B—University Center 

Economic Development Program 

§ 306.4 Purpose and scope. 

The University Center Economic 

Development Program is intended to 

help improve the economies of 

distressed Regions. Institutions of 

higher education have many assets, 

such as faculty, staff, libraries, 

laboratories and computer systems that 

can address local economic problems 

and opportunities. With Investment 

Assistance, institutions of higher 

education establish and operate research 

centers (‘‘University Centers’’) that 

provide technical assistance to public 

and private sector organizations with 

the goal of enhancing local economic 

development. 

§ 306.5 Award requirements. 

EDA provides Investment Assistance 

to University Center Projects in 

accordance with the general evaluation 

and selection criteria set forth in part 

301 of this chapter, the competitive 

selection process outlined in the 

applicable FFO, and the extent to which 

the Project: 

(a) Addresses the economic 

development needs, issues and 

opportunities of the Region and will 

benefit distressed areas in the Region; 

(b) Provides service and value that are 

unique and will maximize coordination 

with other organizations in the Region; 


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(c) Has the commitment and support 

(both financial and non-financial) of the 

highest management levels of the 

sponsoring institution; 

(d) Outlines activities consistent with 

the expertise of the proposed staff, 

academic programs and other resources 

available within the sponsoring 

institution; and 

(e) Documents past experience of the 

sponsoring institution in operating 

technical assistance programs. 

§ 306.6 Application requirements. 

(a) EDA will provide Investment 

Assistance under this subpart for the 

period of time required to complete the 

Project’s scope of work, as specifically 

outlined in the applicable FFO. 

(b) For a Project of significant 

Regional or national scope, EDA may 

waive the requirement set forth in 

§ 301.2(b) of this chapter that the nonprofit organization act in cooperation 

with officials of a political subdivision 

of a State. 

(c) The Investment Rate for 

Investments under this subpart shall be 

determined in accordance with 

§ 301.4(b)(4) of this chapter. 

(d) At least eighty (80) percent of EDA 

funding must be allocated to direct costs 

of program delivery. 

§ 306.7 Performance evaluations of 

University Centers. 

(a) EDA will: 

(1) Evaluate each University Center 

within three (3) years after the initial 

Investment award and at least once 

every three (3) years thereafter, so long 

as such University Center continues to 

receive Investment Assistance; and 

(2) Assess the University Center’s 

contribution to providing technical 

assistance, conducting applied research, 

meeting program performance objectives 

(as evidenced by retention and creation 

of employment opportunities) and 

disseminating Project results in 

accordance with the scope of work 

funded during the evaluation period. 

(b) The performance evaluation will 

determine in part whether a University 

Center can compete to receive 

Investment Assistance under the 

University Center Economic 

Development Program for the following 

Investment Assistance cycle. 

(c) For peer review, EDA shall ensure 

the participation of at least one (1) other 

University Center in the performance 

evaluation on a cost-reimbursement 

basis. 

PART 307—ECONOMIC ADJUSTMENT 

ASSISTANCE INVESTMENTS 

Subpart A—General 

Sec. 

307.1 Purpose. 

307.2 Criteria for Economic Adjustment 

Assistance Investments. 

307.3 Use of Economic Adjustment 

Assistance Investments. 

307.4 Award requirements. 

307.5 Application requirements. 

307.6 Economic Adjustment Assistance 

post-approval requirements. 

Subpart B—Special Requirements for 

Revolving Loan Funds and Use of Grant 

Funds 

307.7 Revolving Loan Funds established for 

business lending. 

307.8 Definitions. 

307.9 Revolving Loan Fund Plan. 

307.10 Pre-loan requirements. 

307.11 Disbursement of funds to Revolving 

Loan Funds. 

307.12 Revolving Loan Fund Income. 

307.13 Records and retention. 

307.14 Revolving Loan Fund semi-annual 

and annual reports. 

307.15 Prudent management of Revolving 

Loan Funds. 

307.16 Effective utilization of Revolving 

Loan Funds. 

307.17 Uses of capital. 

307.18 Addition of lending areas; merger of 

RLFs. 

307.19 RLF loan portfolio Sales and 

Securitizations. 

307.20 Partial liquidation and liquidation 

upon termination. 

307.21 Termination of Revolving Loan 

Funds. 

307.22 Variances. 

Authority: 42 U.S.C. 3211; 42 U.S.C. 3149; 

42 U.S.C. 3161; 42 U.S.C. 3162; 42 U.S.C. 

3233; Department of Commerce Organization 

Order 10–4. 

Subpart A—General 

§ 307.1 Purpose. 

The purpose of Economic Adjustment 

Assistance Investments is to address the 

needs of communities experiencing 

adverse economic changes that may 

occur suddenly or over time, including 

but not limited to those caused by: 

(a) Military base closures or 

realignments, defense contractor 

reductions in force, or U.S. Department 

of Energy defense-related funding 

reductions; 

(b) Federally-Declared Disasters; 

(c) International trade; 

(d) Long-term economic deterioration; 

(e) Loss of a major community 

employer; or 

(f) Loss of manufacturing jobs. 

§ 307.2 Criteria for Economic Adjustment 

Assistance Investments. 

(a) Economic Adjustment Assistance 

Investments are intended to enhance a 

distressed community’s ability to 

compete economically by stimulating 

private investment in targeted economic 

sectors through use of tools that: 

(1) Help develop and implement a 

CEDS; 

(2) Expand the capacity of public 

officials and economic development 

organizations to work effectively with 

businesses; 

(3) Assist in overcoming major 

obstacles identified in the CEDS; 

(4) Enable communities to plan and 

coordinate the use of Federal resources 

and other resources available to support 

economic recovery, development of 

Regional economies, or recovery from 

natural or other disasters; or 

(5) Encourage the development of 

innovative public and private 

approaches to economic restructuring 

and revitalization. 

(b) Economic Adjustment Assistance 

Investments may be made when the 

Project funded by the Investment will 

help the Region meet a Special Need. 

The Region in which a Project is located 

must have a CEDS with which the 

Project is consistent (except that this 

requirement shall not apply to Strategy 

Grants described in § 307.3). 

§ 307.3 Use of Economic Adjustment 

Assistance Investments. 

Economic Adjustment Assistance 

Investments may be used to develop a 

CEDS to alleviate long-term economic 

deterioration or a sudden and severe 

economic dislocation (a ‘‘Strategy 

Grant’’), or to fund a Project 

implementing such a CEDS (an 

‘‘Implementation Grant’’). 

(a) Strategy Grants support 

developing, updating or refining a 

CEDS. 

(b) Implementation Grants support the 

execution of activities identified in a 

CEDS. Specific activities may be funded 

as separate Investments or as multiple 

elements of a single Investment. 

Examples of Implementation Grant 

activities include: 

(1) Infrastructure improvements, such 

as site acquisition, site preparation, 

construction, rehabilitation and 

equipping of facilities; 

(2) Provision of business or 

infrastructure financing through the 

capitalization of Recipient-administered 

Revolving Loan Funds (‘‘RLFs’’), which 

may include loans, loan guaranties and 

interest rate buy-downs to facilitate 

business lending activities; 

(3) Market or industry research and 

analysis; 

(4) Technical assistance, including 

organizational development such as 

business networking, restructuring or 

improving the delivery of business 

services, or feasibility studies; 

(5) Public services; 

(6) Training; and 

(7) Other activities justified by the 

CEDS that satisfy applicable statutory 

and regulatory requirements. 


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§ 307.4 Award requirements. 

(a) General. EDA will select Economic 

Adjustment Assistance Projects in 

accordance with part 301 of this chapter 

and the additional criteria provided in 

paragraphs (b) and (c) of this section, as 

applicable. 

(b) Strategy Grants. EDA will review 

Strategy Grant proposals to ensure that 

the proposed activities conform to the 

CEDS requirements set forth in § 303.7 

of this chapter. 

(c) Implementation Grants. 

(1) EDA will review Implementation 

Grant proposals for the extent to which: 

(i) The applicable CEDS meets the 

requirements in § 303.7 of this chapter; 

and 

(ii) The proposed Project is identified 

as a necessary element of or consistent 

with the applicable CEDS. 

(2) Revolving Loan Fund Grants. For 

Eligible Applicants seeking to capitalize 

or recapitalize an RLF, EDA will review 

the proposals for: 

(i) The need for a new or expanded 

public financing tool to enhance other 

business assistance programs and 

services targeting economic sectors and 

locations described in the CEDS; 

(ii) The types of financing activities 

anticipated; and 

(iii) The capacity of the RLF 

organization to manage lending 

activities, create networks between the 

business community and other financial 

providers, and implement the CEDS. 

(d) Funding priority considerations 

for Economic Adjustment Assistance 

may be set forth in an FFO. 

§ 307.5 Application requirements. 

(a) Each application for Economic 

Adjustment Assistance must: 

(1) Include or incorporate by reference 

(if so approved by EDA) a CEDS, except 

that a CEDS is not required when 

applying for a Strategy Grant; and 

(2) Explain how the proposed Project 

meets the criteria set forth in § 307.2. 

(b) For a technical assistance Project 

of significant Regional or national scope 

under this subpart, EDA may waive the 

requirement set forth in § 301.2(b) of 

this chapter that the non-profit 

organization act in cooperation with 

officials of a political subdivision of a 

State. 

§ 307.6 Economic Adjustment Assistance 

post-approval requirements. 

In addition to the post-approval 

requirements set forth in § 302.18 of this 

chapter: 

(a) Strategy Grants shall comply with 

the applicable provisions of part 303 of 

this chapter; 

(b) Implementation Grants involving 

construction shall comply with the 

provisions of subpart B of part 305 of 

this chapter; 

(c) Implementation Grants not 

involving construction shall comply 

with the applicable provisions of 

subpart A of part 306 of this chapter; 

and 

(d) RLF Grants shall comply with the 

requirements set forth in this part and 

in the following publications: 

(1) EDA’s RLF Standard Terms and 

Conditions; and 

(2) The compliance supplement to 

OMB Circular A–133 (the ‘‘Compliance 

Supplement’’). The Compliance 

Supplement is available via the Internet 

at http://www.omb.gov. 

Subpart B—Special Requirements for 

Revolving Loan Funds and Use of 

Grant Funds 

§ 307.7 Revolving Loan Funds established 

for business lending. 

Economic Adjustment Assistance 

Grants to capitalize or recapitalize RLFs 

most commonly fund business lending, 

but may also fund public infrastructure 

or other authorized lending activities. 

The requirements in this subpart B 

apply to RLFs established for business 

lending activities. Special award 

conditions may contain appropriate 

modifications of these requirements to 

accommodate non-business RLF awards. 

§ 307.8 Definitions. 

In addition to the defined terms set 

forth in § 300.3 of this chapter, the 

following terms used in this part shall 

have the following meanings: 

Closed Loan means any loan for 

which all required documentation has 

been, received, reviewed and executed 

by an RLF Recipient. 

Exempt Security means a Security 

that is not subject to certain SEC or 

Federal Reserve Board rules. 

Guaranteed Loan means a loan made 

and serviced by a third party lending 

institution under a loan guaranty 

agreement providing that an RLF 

Recipient will purchase the guaranteed 

portion of the loan in the event of 

borrower default. 

Prudent Lending Practices means 

generally accepted underwriting and 

lending practices for public loan 

programs, based on sound judgment to 

protect Federal and lender interests. 

Prudent Lending Practices include loan 

processing, documentation, loan 

approval, collections, servicing, 

administrative procedures, collateral 

protection and recovery actions. 

Prudent Lending Practices provide for 

compliance with local laws and filing 

requirements to perfect and maintain a 

security interest in RLF collateral. 

Recapitalization Grants are 

Investments of additional Grant funds to 

increase the capital base of an RLF. 

Revolving Phase means that stage of 

the RLF’s business lending activities 

that commences immediately after all 

Grant funds have been disbursed to the 

RLF Recipient. 

RLF Capital means, at any point in 

time, the aggregate amount of cash held 

by the RLF Recipient from any of the 

following sources: Grant funds; Local 

Share; repayments of principal from 

RLF loans; and RLF Income. The initial 

RLF capital base is normally comprised 

of EDA funds and the cash Local Share. 

RLF Income means interest earned on 

outstanding loan principal and RLF 

accounts holding RLF funds (excluding 

interest earned on excess funds 

pursuant to § 307.16(c)(2)), all fees and 

charges received by the RLF, and other 

income generated from RLF operations. 

An RLF Recipient may use RLF Income 

only to capitalize the RLF for financing 

activities and to cover eligible and 

reasonable costs necessary to administer 

the RLF, unless otherwise provided for 

in the Grant agreement or approved in 

writing by EDA. RLF Income excludes 

repayments of principal and any interest 

remitted to the U.S. Treasury pursuant 

to § 307.16(c)(2)(i). 

RLF Third Party, for purposes of this 

subpart B only, means an Eligible 

Recipient or for-profit entity selected by 

EDA through a request for proposals or 

Cooperative Agreement to facilitate and/ 

or manage the intended liquidation of 

an RLF. 

Sale means an EDA-approved sale by 

an RLF Recipient of its RLF loan 

portfolio (or a portion thereof) to a third 

party. A third party may participate in 

a subsequent Securitization offered in a 

secondary market transaction and 

collateralized by the underlying RLF 

loan portfolio (or a portion thereof). 

SEC or the Commission means the 

U.S. Securities and Exchange 

Commission. 

Securitization refers to the financing 

technique of securing an investment of 

new capital with a stream of income 

generated by aggregating similar 

instruments such as loans or mortgages 

into a new transferable Security. 

Security means any investment 

instrument issued by a corporation, 

government or other organization which 

offers evidence of debt or equity. 

§ 307.9 Revolving Loan Fund Plan. 

All RLF Recipients shall manage RLFs 

in accordance with an RLF plan (the 

‘‘RLF Plan’’ or ‘‘Plan’’) as described in 

this section. The Plan shall be submitted 

to and approved by EDA. 

(a) Format and content. 


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(1) Part I of the Plan titled ‘‘Revolving 

Loan Fund Strategy’’ shall summarize 

the CEDS and business development 

objectives and shall describe the RLF’s 

financing strategy, policy and portfolio 

standards. 

(2) Part II of the Plan titled 

‘‘Operational Procedures’’ shall serve as 

the internal operating manual for the 

RLF Recipient. The administrative 

procedures for operating the RLF must 

be consistent with Prudent Lending 

Practices. 

(b) Evaluation of RLF Plans. EDA will 

use the following criteria in evaluating 

Plans: 

(1) The Plan must be consistent with 

the CEDS or EDA-approved strategy for 

the Region; 

(2) The Plan must identify the 

strategic purpose of the RLF and must 

describe the selection of the financing 

strategy and lending criteria, including: 

(i) An analysis of the local capital 

market and the financing needs of the 

targeted businesses; and 

(ii) Financing policies and portfolio 

standards that are consistent with EDA 

policies and requirements; and 

(3) The Plan must demonstrate an 

adequate understanding of commercial 

loan portfolio management procedures, 

including loan processing, 

underwriting, closing, disbursements, 

collections, monitoring, and 

foreclosures. It shall also provide 

sufficient administrative procedures to 

prevent conflicts of interest and to 

ensure accountability, safeguarding of 

assets and compliance with Federal and 

local laws. 

(c) Modification of RLF Plans. An RLF 

Recipient must request and obtain EDA 

approval prior to any modification of 

the Plan. 

§ 307.10 Pre-loan requirements. 

(a) RLF Recipients must adopt 

procedures to review the impacts of 

prospective loan proposals on the 

physical environment. The Plan must 

provide for compliance with applicable 

environmental laws and other 

regulations, including but not limited to 

parts 302 and 314 of this chapter. The 

RLF Recipient must also adopt 

procedures to comply, and ensure that 

potential borrowers comply, with 

applicable environmental laws and 

regulations. 

(b) RLF Recipients must ensure that 

prospective borrowers, consultants, or 

contractors are aware of and comply 

with the Federal statutory and 

regulatory requirements that apply to 

activities carried out with RLF loans. 

RLF loan agreements shall include 

applicable Federal requirements to 

ensure compliance and RLF Recipients 

must adopt procedures to diligently 

correct instances of non-compliance, 

including loan call stipulations. 

(c) All RLF loan documents and 

procedures must protect and hold the 

Federal government harmless from and 

against all liabilities that the Federal 

government may incur as a result of 

providing an RLF Grant to assist directly 

or indirectly in site preparation or 

construction, as well as the direct or 

indirect renovation or repair of any 

facility or site. These protections apply 

to the extent that the Federal 

government may become potentially 

liable as a result of ground water, 

surface, soil or other natural or manmade conditions on the property caused 

by operations of the RLF Recipient or 

any of its borrowers, predecessors or 

successors. 

§ 307.11 Disbursement of funds to 

Revolving Loan Funds. 

(a) Pre-disbursement requirements. 

Prior to any disbursement of EDA funds, 

RLF Recipients are required to provide 

in a form acceptable to EDA: 

(1) Evidence of fidelity bond coverage 

for persons authorized to handle funds 

under the Grant award in an amount 

sufficient to protect the interests of EDA 

and the RLF. Such insurance coverage 

must exist at all times during the 

duration of the RLF’s operation; and 

(2) Evidence of certification in 

accordance with § 307.15(b)(1). 

(b) Timing of request for 

disbursements. An RLF Recipient shall 

request disbursements of Grant funds 

only to close a loan or disburse RLF 

funds to a borrower. The RLF Recipient 

must disburse the RLF funds to a 

borrower within thirty (30) days of 

receipt of the Grant funds. Any Grant 

funds not disbursed within the thirty 

(30) day period shall be refunded to 

EDA pursuant to paragraph (e) of this 

section. 

(c) Amount of disbursement. The 

amount of a disbursement of Grant 

funds shall not exceed the difference, if 

any, between the RLF Capital and the 

amount of a new RLF loan, less the 

amount, if any, of the Local Share 

required to be disbursed concurrent 

with the Grant funds. However, RLF 

Income held to reimburse eligible 

administrative costs need not be 

disbursed in order to draw additional 

Grant funds. 

(d) EDA funds account. The RLF 

Recipient shall establish and maintain 

an interest-bearing account designated 

as the ‘‘EDA funds account,’’ indicating 

that monies deposited therein are held 

for funding approved Closed Loans. The 

RLF Recipient shall withdraw funds or 

order a transfer from the EDA funds 

account for lending to eligible borrowers 

or return of funds to EDA. 

(e) Delays. If the RLF Recipient 

receives Grant funds and the RLF loan 

disbursement is subsequently delayed 

beyond thirty (30) days, the RLF 

Recipient must notify the applicable 

grants officer and return such nondisbursed funds to EDA. Grant funds 

returned to EDA shall be available to the 

RLF Recipient for future draw-downs. 

When returning prematurely drawn 

Grant funds, the RLF Recipient must 

clearly identify on the face of the check 

or in the written notification to the 

applicable grants officer ‘‘EDA,’’ the 

Grant award number, the words 

‘‘Premature Draw,’’ and a brief 

description of the reason for returning 

the Grant funds. 

(f) Local Share. 

(1) Cash Local Share of the RLF may 

only be used for lending purposes. The 

cash Local Share must be used either in 

proportion to the Grant funds or at a 

faster rate than the Grant funds. 

(2) When an RLF has a combination 

of In-Kind Contributions and cash Local 

Share, the cash Local Share and the 

Grant funds will be disbursed 

proportionately as needed for lending 

activities, provided that the last twenty 

(20) percent of the Grant funds may not 

be disbursed until all cash Local Share 

has been expended. The full amount of 

the cash Local Share shall remain for 

use in the RLF. 

§ 307.12 Revolving Loan Fund Income. 

(a) General requirements. RLF Income 

must be placed into the RLF Capital 

base for the purpose of making loans or 

paying for eligible and reasonable 

administrative costs associated with the 

RLF’s operations. RLF Income may fund 

administrative costs, provided: 

(1) Such RLF Income and the 

administrative costs are incurred in the 

same twelve-month (12) reporting 

period; 

(2) RLF Income that is not used for 

administrative costs during the twelvemonth (12) reporting period is made 

available for lending activities; 

(3) RLF Income shall not be 

withdrawn from the RLF Capital base in 

a subsequent reporting period for any 

purpose other than lending without the 

prior written consent of EDA; and 

(4) The RLF Recipient completes an 

RLF Income and Expense Statement (the 

‘‘Income and Expense Statement’’) as 

required under § 307.14(c). 

(b) Compliance guidelines. When 

charging costs against RLF Income, RLF 

Recipients must comply with applicable 

OMB cost principles and RLF audit 

guidelines as found in: 


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(1) OMB Circular A–87 for State, 

local, and Indian tribal governments, 

OMB Circular A–122 for non-profit 

organizations other than institutions of 

higher education, hospitals or 

organizations named in OMB Circular 

A–122 as not subject to such circular, 

and OMB Circular A–21 for educational 

institutions; and 

(2) OMB Circular A–133 for Single 

Audit Act requirements for States, local 

governments, and non-profit 

organizations and the Compliance 

Supplement, as appropriate. 

(c) Priority of payments on defaulted 

RLF loans. When an RLF Recipient 

receives proceeds on a defaulted RLF 

loan that is not subject to liquidation 

pursuant to § 307.20, such proceeds 

shall be applied in the following order 

of priority: 

(1) First, towards any costs of 

collection; 

(2) Second, towards outstanding 

penalties and fees; 

(3) Third, towards any accrued 

interest to the extent due and payable; 

and 

(4) Fourth, towards any outstanding 

principal balance. 

§ 307.13 Records and retention. 

(a) Closed Loan files and related 

documents. The RLF Recipient shall 

maintain Closed Loan files and all 

related documents, books of account, 

computer data files and other records 

over the term of the Closed Loan and for 

a three-year (3) period from the date of 

final disposition of such Closed Loan. 

The date of final disposition of a Closed 

Loan is the date: 

(1) Principal, interest, fees, penalties 

and all other costs associated with the 

Closed Loan have been paid in full; or 

(2) Final settlement or discharge and 

cessation of collection efforts of any 

unpaid amounts associated with the 

Closed Loan have occurred. 

(b) Administrative records. RLF 

Recipients must at all times: 

(1) Maintain adequate accounting 

records and source documentation to 

substantiate the amount and percent of 

RLF Income expended for eligible RLF 

administrative costs. 

(2) Retain records of administrative 

expenses incurred for activities and 

equipment relating to the operation of 

the RLF for three (3) years from the 

actual submission date of the last semiannual or annual report that covers the 

period that such costs were claimed, or 

for five (5) years from the date the costs 

were claimed, whichever is less. 

(3) Make available for inspection 

retained records, including those 

retained for longer than the required 

period. The record retention periods 

described in this section are minimum 

periods and such prescription does not 

limit any other record retention 

requirement of law or agreement. In no 

event will EDA question claimed 

administrative costs that are more than 

three (3) years old, unless fraud is at 

issue. 

§ 307.14 Revolving Loan Fund semiannual and annual reports. 

(a) Frequency of reports. All RLF 

Recipients, including those receiving 

Recapitalization Grants for existing 

RLFs, must submit semi-annual reports. 

EDA may approve the substitution of 

annual reports for semi-annual reports 

upon written request by the Recipient if 

the following conditions have been met: 

(1) At least one (1) year has passed 

from the date that the RLF has loaned 

an aggregate amount equal to its initial 

RLF Capital base; 

(2) The RLF Recipient has timely 

submitted accurate semi-annual reports 

for the preceding two (2) years; 

(3) The RLF Recipient has ensured 

completion and submission to EDA of 

required periodic audits for the most 

recent audit period within the preceding 

two (2) years; and 

(4) EDA determines that the RLF is in 

compliance with all applicable RLF 

requirements. 

(b) Report contents. RLF Recipients 

must certify as part of the semi-annual 

or annual report to EDA that the RLF is 

operating in accordance with the 

applicable RLF Plan. RLF Recipients 

must also describe (and propose 

pursuant to § 307.9) any modifications 

to the RLF Plan to ensure effective use 

of the RLF as a strategic financing tool. 

(c) RLF Income and Expense 

Statement. 

(1) An RLF Recipient using either fifty 

(50) percent or more (or more than 

$100,000) of RLF Income for 

administrative costs in the twelvemonth (12) reporting period must 

submit a completed Income and 

Expense Statement annually to the 

appropriate regional office within 

ninety (90) days of the end of its fiscal 

year. An RLF Recipient using less than 

fifty (50) percent and less than $100,000 

of RLF Income for administrative costs 

in the twelve-month (12) reporting 

period must prepare and retain for four 

(4) years a completed Income and 

Expense Statement for the applicable 

fiscal year, which shall be made 

available to EDA upon request. 

(2) Performance measures. As part of 

the semi-annual or annual report, RLF 

Recipients shall submit to EDA the 

information identified as the ‘‘Core 

Performance Measures’’ in the special 

award conditions of the Grant 

documents. EDA will advise RLF 

Recipients within a reasonable time of 

any required modifications to the 

information submitted. 

§ 307.15 Prudent management of 

Revolving Loan Funds. 

(a) Accounting principles. 

(1) RLFs shall operate in accordance 

with generally accepted accounting 

principles (‘‘GAAP’’) as in effect from 

time to time in the United States and the 

provisions outlined in OMB Circular A–

133 and the Compliance Supplement, as 

applicable. 

(2) In accordance with GAAP, a loan 

loss reserve may be recorded in the RLF 

Recipient’s financial statements to show 

the fair market value of an RLF’s loan 

portfolio, provided this loan loss reserve 

is non-funded and represents non-cash 

entries. 

(b) Loan and accounting system 

documents. 

(1) Within sixty (60) days prior to the 

initial disbursement of EDA funds, an 

independent accountant familiar with 

the RLF Recipient’s accounting system 

shall certify to EDA and the RLF 

Recipient that such system is adequate 

to identify, safeguard and account for all 

RLF Capital, outstanding RLF loans and 

other RLF operations. 

(2) Prior to the disbursement of any 

EDA funds, the RLF Recipient shall 

certify that standard RLF loan 

documents reasonably necessary or 

advisable for lending are in place and 

that these documents have been 

reviewed by its legal counsel for 

adequacy and compliance with the 

terms and conditions of the Grant and 

applicable State and local law. The 

standard loan documents must include, 

at a minimum, the following: 

(i) Loan application; 

(ii) Loan agreement; 

(iii) Promissory note; 

(iv) Security agreement(s); 

(v) Deed of trust or mortgage (as 

applicable); 

(vi) Agreement of prior lien holder (as 

applicable); and 

(vii) Guaranty agreement (as 

applicable). 

(c) Interest rates. An RLF Recipient 

may make loans and may guarantee 

loans to eligible borrowers at interest 

rates and under conditions determined 

by the RLF Recipient to be appropriate 

in achieving the goals of the RLF. 

However, the minimum interest rate an 

RLF can charge is four (4) percentage 

points below the lesser of the current 

money center prime interest rate quoted 

in the Wall Street Journal, or the 

maximum interest rate allowed under 

State law. In no event shall the interest 

rate be less than four (4) percent. 


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However, should the prime interest rate 

listed in the Wall Street Journal exceed 

fourteen (14) percent, the minimum RLF 

interest rate is not required to be raised 

above ten (10) percent if doing so 

compromises the ability of the RLF 

Recipient to implement its financing 

strategy. 

(d) Private leveraging. (1) RLF loans 

must leverage private investment of at 

least two dollars for every one dollar of 

such RLF loans. This leveraging 

requirement applies to the RLF portfolio 

as a whole rather than to individual 

loans and is effective for the duration of 

the RLF’s operation. To be classified as 

leveraged, private investment must be 

made within twelve (12) months prior to 

approval of an RLF loan, as part of the 

same business development Project, and 

may include: 

(i) Capital invested by the borrower or 

others; 

(ii) Financing from private entities; or 

(iii) The non-guaranteed portions and 

ninety (90) percent of the guaranteed 

portions of the U.S. Small Business 

Administration’s 7(A) loans and 504 

debenture loans. 

(2) Private investments shall not 

include accrued equity in a borrower’s 

assets. 

§ 307.16 Effective utilization of Revolving 

Loan Funds. 

(a) Loan closing and disbursement 

schedule. 

(1) RLF loan activity must be 

sufficient to draw down Grant funds in 

accordance with the schedule 

prescribed in the award conditions for 

loan closings and disbursements to 

eligible RLF borrowers. The schedule 

usually requires that the RLF Recipient 

lend the entire amount of the initial RLF 

Capital base within three (3) years of the 

Grant award. 

(2) If an RLF Recipient fails to meet 

the prescribed lending schedule, EDA 

may de-obligate the non-disbursed 

balance of the RLF Grant. EDA may 

allow exceptions where: 

(i) Closed Loans approved prior to the 

schedule deadline will commence and 

complete disbursements within fortyfive (45) days of the deadline; 

(ii) Closed Loans have commenced 

(but not completed) disbursement 

obligations prior to the deadline; or 

(iii) EDA has approved a time 

schedule extension pursuant to 

§ 307.16(b). 

(b) Time schedule extensions. 

(1) RLF Recipients shall promptly 

inform EDA in writing of any condition 

that may adversely affect their ability to 

meet the prescribed schedule deadlines. 

RLF Recipients must submit a written 

request to EDA for continued use of 

Grant funds beyond a missed deadline 

for disbursement of RLF funds. RLF 

Recipients must provide good reason for 

the delay in their extension requests by 

demonstrating that: 

(i) The delay was unforeseen or 

beyond the control of the RLF Recipient; 

(ii) The financial need for the RLF 

still exists; 

(iii) The current and planned use and 

the anticipated benefits of the RLF will 

remain consistent with the current 

CEDS and the RLF Plan; and 

(iv) The proposal of a revised time 

schedule is reasonable. An extension 

request must also provide an 

explanation as to why no further delays 

are anticipated. 

(2) EDA is under no obligation to 

grant a time extension and in the event 

an extension is denied, EDA may 

deobligate all or part of the unused 

Grant funds and terminate the Grant. 

(c) Capital utilization standard. 

(1) During the Revolving Phase, RLF 

Recipients must manage their 

repayment and lending schedules to 

provide that at all times at least seventyfive (75) percent of the RLF Capital is 

loaned or committed. The following 

exceptions apply: 

(i) An RLF Recipient that anticipates 

making large loans relative to the size of 

its RLF Capital base may propose a Plan 

that provides for maintaining a capital 

utilization percentage greater than 

twenty-five (25) percent; and 

(ii) EDA may require an RLF 

Recipient with an RLF Capital base in 

excess of $4 million to adopt a Plan that 

maintains a proportionately higher 

percentage of its funds loaned. 

(2) When the percentage of loaned 

RLF Capital falls below the applicable 

capital utilization percentage, the dollar 

amount of the RLF funds equivalent to 

the difference between the actual 

percentage of RLF Capital loaned and 

the applicable capital utilization 

percentage is referred to as ‘‘excess 

funds.’’

(i) Sequestration of excess funds. If 

the RLF Recipient fails to satisfy the 

applicable capital utilization percentage 

requirement for two (2) consecutive 

reporting intervals, EDA may require the 

RLF Recipient to deposit excess funds 

in an interest-bearing account separate 

from the EDA funds account. The 

portion of interest earned on the 

account holding excess funds 

attributable to the RLF Grant shall be 

remitted to the U.S. Treasury. RLF 

Recipients must obtain EDA’s written 

authorization to withdraw any 

sequestered funds. 

(ii) Persistent non-compliance. An 

RLF Recipient will generally be allowed 

a reasonable period of time to lend 

excess funds and achieve the applicable 

capital utilization percentage. However, 

if an RLF Recipient fails to achieve the 

applicable capital utilization percentage 

after a reasonable period of time, as 

determined by EDA, it may be subject to 

sanctions such as suspension or 

termination. 

§ 307.17 Uses of capital. 

(a) General. RLF Capital shall be used 

for the purpose of making RLF loans 

that are consistent with an RLF Plan or 

such other purposes approved by EDA. 

To ensure that RLF funds are used as 

intended, each loan agreement must 

clearly state the purpose of each loan. 

(b) Restrictions on use of RLF Capital. 

RLF Capital shall not be used to: 

(1) Acquire an equity position in a 

private business; 

(2) Subsidize interest payments on an 

existing RLF loan; 

(3) Provide for borrowers’ required 

equity contributions under other 

Federal Agencies’ loan programs; 

(4) Enable borrowers to acquire an 

interest in a business either through the 

purchase of stock or through the 

acquisition of assets, unless sufficient 

justification is provided in the loan 

documentation. Sufficient justification 

may include acquiring a business to 

save it from imminent closure or to 

acquire a business to facilitate a 

significant expansion or increase in 

investment with a significant increase in 

jobs. The potential economic benefits 

must be clearly consistent with the 

strategic objectives of the RLF; 

(5) Provide RLF loans to a borrower 

for the purpose of investing in interestbearing accounts, certificates of deposit 

or any investment unrelated to the RLF; 

or 

(6) Refinance existing debt, unless: 

(i) The RLF Recipient sufficiently 

demonstrates in the loan documentation 

a ‘‘sound economic justification’’ for the 

refinancing (e.g., the refinancing will 

support additional capital investment 

intended to increase business activities). 

For this purpose, reducing the risk of 

loss to an existing lender(s) or lowering 

the cost of financing to a borrower shall 

not, without other indicia, constitute a 

sound economic justification; or 

(ii) RLF Capital will finance the 

purchase of the rights of a prior lien 

holder during a foreclosure action 

which is necessary to preclude a 

significant loss on an RLF loan. RLF 

Capital may be used for this purpose 

only if there is a high probability of 

receiving compensation from the sale of 

assets sufficient to cover an RLF’s costs 

plus a reasonable portion of the 

outstanding RLF loan within eighteen 


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(18) months following the date of 

refinancing; 

(c) Credit not otherwise available. RLF 

Recipients must determine and clearly 

demonstrate in the loan documentation 

for each RLF loan that credit is not 

otherwise available on terms and 

conditions that permit the completion 

or successful operation of the activity to 

be financed. 

(d) Use of In-Kind Contributions. InKind Contributions may satisfy 

Matching Share requirements when 

specifically authorized in the terms and 

provisions of the RLF Grant and may be 

used to provide technical assistance to 

borrowers or for eligible RLF 

administrative costs. 

(e) Loan guaranty agreements. Prior to 

the full disbursement of Grant funds, 

the RLF Recipient shall not use RLF 

Capital to guarantee loans made by 

other lending institutions. After the full 

disbursement of Grant funds, RLF 

Capital may be used to guarantee loans 

of private lenders, provided the RLF 

Recipient has obtained prior written 

approval from EDA of its proposed loan 

guaranty activities and submitted to 

EDA: 

(1) The maximum guaranty 

percentage offered by the RLF Recipient 

and accepted by the lender; 

(2) The loan guaranty agreement 

which must (at a minimum) document: 

(i) The RLF Recipient’s maximum 

liability; 

(ii) The respective rights, 

representations and obligations of the 

RLF Recipient and lender with regard to 

collection procedures, servicing 

requirements, borrower delinquency, 

events of defaults and termination of the 

loan guaranty agreement; 

(iii) The responsible party’s 

obligations in the event of any 

foreclosure, bankruptcy or insolvency 

proceeding; 

(iv) The responsible party’s 

obligations with respect to collateral 

disposition and the call provisions for 

the Guaranteed Loan; and 

(v) The distribution of interest income 

and loan fees, if any, to the RLF; and 

(3) Certification from the RLF 

Recipient’s legal counsel that the loan 

guaranty agreement is valid and 

enforceable under applicable State law; 

and 

(4) An amended RLF Plan 

accommodating the loan guaranty 

activities approved by EDA (as 

necessary). 

§ 307.18 Addition of lending areas; merger 

of RLFs. 

(a)(1) Addition of Lending Areas. An 

RLF Recipient shall make loans to 

implement and assist economic activity 

only within its EDA-approved lending 

area, as set forth and defined in the RLF 

Grant and the Plan. An RLF Recipient 

may add an additional lending area (an 

‘‘Additional Lending Area’’) to its 

existing lending area to create a new 

merged lending area (the ‘‘New Lending 

Area’’) only with EDA’s prior written 

approval and subject to the following 

provisions and conditions: 

(i) EDA shall have disbursed the full 

amount of its Investment Assistance to 

the RLF Recipient; 

(ii) The Additional Lending Area 

must fulfill the economic distress 

criteria for Economic Adjustment 

Investments under this part and in 

accordance with § 301.3(a) of this 

chapter; 

(iii) Prior to EDA’s disbursement of 

additional funds to the RLF Recipient 

(for example, through a 

recapitalization), EDA shall determine a 

new Investment Rate for the New 

Lending Area based on the criteria set 

forth in § 301.4 of this chapter; 

(iv) The RLF Recipient must 

demonstrate that the Additional 

Lending Area is consistent with its 

CEDS, or modify its CEDS for any such 

Additional Lending Area, in accordance 

with § 307.9(b)(1); 

(v) The RLF Recipient shall modify its 

Plan to incorporate the Additional 

Lending Area and revise its lending 

strategy, as necessary; 

(vi) The RLF Recipient shall execute 

an amended RLF Grant award 

agreement, as necessary; and 

(vii) The RLF Recipient fulfills any 

other conditions reasonably requested 

by EDA. 

(2) The New Lending Area 

designation shall remain in place 

indefinitely following EDA approval. 

(b) Merger of RLFs. 

(1) Single RLF Recipient. An RLF 

Recipient with more than one (1) EDAfunded RLF Grant may consolidate two 

(2) or more EDA-funded RLFs into one 

(1) surviving RLF with EDA’s prior 

written approval and provided: 

(i) It meets the requirements to obtain 

annual report status identified in 

paragraphs (a)(2) through (a)(4) of 

§ 307.14; 

(ii) It demonstrates a rational basis for 

undertaking the merger (for example, 

the lending area(s) and borrower criteria 

identified in different RLF Plans are 

compatible, or will be compatible, for 

all RLFs to be consolidated); 

(iii) It amends and consolidates its 

Plan to account for the merger of RLFs, 

including items such as the New 

Lending Area (including any Additional 

Lending Area(s)), its lending strategy 

and borrower criteria; 

(iv) Prior to EDA’s disbursement of 

additional funds to the RLF Recipient 

(for example, through a 

recapitalization), EDA shall determine a 

new Investment Rate for the New 

Lending Area based on the criteria set 

forth in § 301.4 of this chapter; and 

(v) The RLF Recipient fulfills any 

other conditions reasonably requested 

by EDA. 

(2) Multiple RLF Recipients. Two (2) 

or more RLF Recipients may consolidate 

their EDA-funded RLFs into one (1) 

surviving RLF with EDA’s prior written 

approval and provided: 

(i) The surviving RLF Recipient meets 

the requirements to obtain annual report 

status identified in paragraphs (a)(2) 

through (a)(4) of § 307.14; 

(ii) The surviving RLF Recipient 

amends and consolidates its Plan to 

account for the merger of RLFs, 

including items such as the New 

Lending Area (including any Additional 

Lending Area(s)), its lending strategy 

and borrower criteria; 

(iii) Prior to EDA’s disbursement of 

additional funds to the surviving RLF 

Recipient (for example, through a 

recapitalization), EDA shall determine a 

new Investment Rate for the New 

Lending Area based on the criteria set 

forth in § 301.4 of this chapter; 

(iv) EDA must provide written 

approval of the merger agreement(s), 

modifications and revisions to the Plans 

and any other related amendments 

thereto; 

(v) All applicable RLF Grant assets of 

the discharging RLF Recipient(s) 

transfer to the surviving RLF Recipient 

as of the merger’s effective date; and 

(vi) The surviving RLF Recipient 

becomes fully responsible for 

administration of the RLF Grant assets 

transferred and fulfills all surviving RLF 

Grant requirements and any other 

conditions reasonably requested by 

EDA. 

§ 307.19 RLF loan portfolio Sales and 

Securitizations. 

EDA may take such actions as 

appropriate to enable an RLF Recipient 

to sell or securitize RLF loans, except 

that EDA may not issue a Federal 

guaranty covering any issued Security. 

With prior approval from EDA, an RLF 

Recipient may enter into a Sale or a 

Securitization of all or a portion of its 

RLF loan portfolio, provided: 

(a) An RLF Recipient must use all 

proceeds from any Sale or Securitization 

(net of reasonable transaction costs) to 

make additional RLF loans; 

(b) An RLF Recipient must request 

EDA to subordinate its interest in all or 

a portion of any RLF loan portfolio sold 

or securitized; 


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(c) No Security collateralized by RLF 

loans and other RLF property and 

offered in a secondary market 

transaction pursuant to a Securitization 

shall be treated as an Exempt Security 

for purposes of the Securities Act of 

1933, as amended (15 U.S.C. 77a et 

seq.), or the Securities Exchange Act of 

1934, as amended (15 U.S.C. 78a et seq.) 

(the ‘‘Exchange Act’’), unless exempted 

by a rule or regulation issued by the 

Commission; and 

(d) Except as provided in paragraph 

(c), no provision of this section 

supersedes or otherwise affects the 

application of the ‘‘securities laws’’ (as 

such term is defined in section 3(a)(47) 

of the Exchange Act) or the rules, 

regulations or orders issued by the 

Commission or a self-regulatory 

organization under the Commission. 

§ 307.20 Partial liquidation and liquidation 

upon termination. 

(a) Partial liquidation. EDA may 

require an RLF Recipient to transfer any 

RLF loans that are more than one 

hundred and twenty (120) days 

delinquent to an RLF Third Party for 

liquidation. 

(b) Liquidation upon termination. 

When EDA approves the termination of 

an RLF Grant, EDA may assign or 

transfer assets of the RLF to an RLF 

Third Party for liquidation. 

(c) Terms. The following terms will 

govern any liquidation: 

(1) EDA shall have sole discretion in 

choosing the RLF Third Party; 

(2) The RLF Third Party may be an 

Eligible Applicant or a for-profit 

organization not otherwise eligible for 

Investment Assistance; 

(3) EDA may enter into an agreement 

with the RLF Third Party to liquidate 

the assets of one (1) or more RLFs or 

RLF Recipients; 

(4) EDA may allow the RLF Third 

Party to retain a portion of the RLF 

assets, consistent with the agreement 

referenced in paragraph (c)(3) of this 

section, as reasonable compensation for 

services rendered in the liquidation; and 

(5) EDA may require additional 

reasonable terms and conditions. 

(d) Distribution of proceeds. The 

proceeds resulting from any liquidation 

upon termination shall be distributed in 

the following order of priority: 

(1) First, for any third party 

liquidation costs; 

(2) Second, for the payment of EDA’s 

Federal Share (as defined in § 314.5 of 

this chapter); and 

(3) Third, if any proceeds remain, to 

the RLF Recipient. 

§ 307.21 Termination of Revolving Loan 

Funds. 

(a) EDA may suspend or terminate an 

RLF Grant for cause, including but not 

limited to the following reasons: 

(1) Failure to operate the RLF in 

accordance with the Plan, the RLF Grant 

or this part; 

(2) Failure to obtain prior EDA 

approval for material changes to the 

Plan, including provisions for 

administering the RLF; 

(3) Failure to submit timely progress, 

financial and audit reports as required 

by the RLF Grant and § 307.14; and 

(4) Failure to comply with the 

conflicts of interest provisions set forth 

in § 302.17. 

(b) EDA may approve a request from 

an RLF Recipient to terminate an RLF 

Grant. The RLF Recipient must 

compensate the Federal government for 

the Federal Share of the RLF property, 

including the current value of all 

outstanding RLF loans. However, with 

EDA’s prior approval, upon a showing 

of compelling circumstances, the RLF 

Recipient may use for other economic 

development activities a portion of RLF 

property that EDA determines is 

attributable to RLF Income. 

(c) Upon termination, distribution of 

proceeds shall occur in accordance with 

§ 307.20(d). 

§ 307.22 Variances. 

EDA may approve variances to the 

requirements contained in this subpart, 

provided such variances: 

(a) Are consistent with the goals of the 

Economic Adjustment Assistance 

program and with an RLF Plan; 

(b) Are necessary and reasonable for 

the effective implementation of the RLF; 

(c) Are economically and financially 

sound; and 

(d) Do not conflict with any 

applicable legal requirements, including 

Federal, State and local law. 

PART 308—PERFORMANCE 

INCENTIVES 

Sec. 

308.1 Use of funds in Projects constructed 

under projected cost. 

308.2 Performance awards. 

308.3 Planning performance awards. 

Authority: 42 U.S.C. 3151; 42 U.S.C. 3154a; 

42 U.S.C. 3154b; Department of Commerce 

Delegation Order 10–4. 

§ 308.1 Use of funds in Projects 

constructed under projected cost. 

(a) If the Assistant Secretary 

determines before closeout of a 

construction Project funded under parts 

305 or 307 of this chapter that the cost 

of the Project, based on the designs and 

specifications that were the basis of the 

Investment Assistance, has decreased 

because of a decrease in costs, EDA may 

in its discretion approve the use of the 

excess funds (or a portion of the excess 

funds) by the Recipient to: 

(1) Increase the Investment Rate of the 

Project to the maximum percentage 

allowable under § 301.4 of this chapter 

for which the Project was eligible at the 

time of the Investment award; or 

(2) Further improve the Project 

consistent with its purpose. 

(b) EDA, in its sole discretion, may 

use any amount of excess funds 

remaining after application of paragraph 

(a) of this section for other eligible 

Investments. 

(c) In the case of Projects involving 

funds transferred from other Federal 

Agencies, EDA will consult with the 

transferring Agency regarding the use of 

any excess funds. 

§ 308.2 Performance awards. 

(a) A Recipient of Investment 

Assistance under parts 305 or 307 of 

this chapter may receive a performance 

award in connection with an Investment 

made on or after the date of enactment 

of section 215 of PWEDA in an amount 

not to exceed ten (10) percent of the 

amount of the Investment award. 

(b) To receive a performance award, a 

Recipient must demonstrate Project 

performance in one (1) or more of the 

areas listed in this paragraph, weighted 

at the discretion of the Assistant 

Secretary: 

(1) Meet or exceed the Recipient’s 

projection of jobs created; 

(2) Meet or exceed the Recipient’s 

projection of private sector capital 

invested; 

(3) Meet or exceed target dates for 

Project start and completion stated at 

the time of Investment approval; 

(4) Fulfill the proposal evaluation 

criteria set forth in § 301.8 of this 

chapter; or 

(5) Demonstrate other unique Project 

performance characteristics as 

determined by the Assistant Secretary. 

(c) A Recipient may receive a 

performance award no later than three 

(3) years following the Project’s 

closeout. 

(d) A performance award may fund up 

to one hundred (100) percent of the cost 

of an eligible Project or any other 

authorized activity under PWEDA. For 

the purpose of meeting the non-Federal 

share requirement of PWEDA or any 

other statute, the amount of a 

performance award shall be treated as 

non-Federal funds. 

(e) The applicable FFO will set forth 

the requirements, qualifications, 

guidelines and procedures for 

performance awards to be made during 


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the applicable fiscal year, with all 

performance awards being subject to the 

availability of funds. 

§ 308.3 Planning performance awards. 

(a) At the discretion of the Assistant 

Secretary, a Recipient of Investment 

Assistance awarded on or after the date 

of enactment of section 216 of PWEDA 

located in an EDA-funded Economic 

Development District may receive a 

planning performance award in an 

amount not to exceed five (5) percent of 

the amount of the applicable Investment 

award if EDA determines no later than 

three (3) years following closeout of the 

Project that: 

(1) The Recipient, through the Project, 

actively participated in the economic 

development activities of the District; 

(2) The Project demonstrated 

exceptional fulfillment of one (1) or 

more components of, and is otherwise 

in accordance with, the applicable 

CEDS, including any job creation or job 

retention requirements; and 

(3) The Recipient demonstrated 

exceptional collaboration with Federal, 

State and local economic development 

entities throughout the development of 

the Project. 

(b) The Recipient shall use the 

planning performance award to 

increase, up to one hundred (100) 

percent, the Federal share of the cost of 

a Project under this chapter. 

(c) The applicable FFO may set forth 

additional requirements, qualifications 

and guidelines for planning 

performance awards. 

PART 309—REDISTRIBUTIONS OF 

INVESTMENT ASSISTANCE 

Sec. 

309.1 Redistributions under parts 303, 305 

and 306. 

309.2 Redistributions under part 307. 

Authority: 42 U.S.C. 3154c; 42 U.S.C. 3211; 

Department of Commerce Delegation Order 

10–4. 

§ 309.1 Redistributions under parts 303, 

305 and 306. 

(a) General. Except as provided in 

paragraph (b) of this section, a Recipient 

of Investment Assistance under parts 

303, 305 or 306 of this chapter may 

directly expend such Investment 

Assistance or, with prior EDA approval, 

may redistribute such Investment 

Assistance in the form of a subgrant to 

another Eligible Recipient that qualifies 

for Investment Assistance under the 

same part of this chapter as the 

Recipient, to fund required components 

of the scope of work approved for the 

Project. All subgrants made pursuant to 

this section shall be subject to the same 

terms and conditions applicable to the 

Recipient under the original Investment 

Assistance award and must satisfy the 

requirements of PWEDA and of this 

chapter. 

(b) Exception. A Recipient may not 

make a subgrant of Investment 

Assistance received under parts 303 or 

305 of this chapter to a for-profit entity. 

§ 309.2 Redistributions under part 307. 

(a) A Recipient of Investment 

Assistance under part 307 of this 

chapter may directly expend such 

Investment Assistance or, with prior 

EDA approval, may redistribute such 

Investment Assistance in the form of: 

(1) A subgrant to another Eligible 

Recipient that qualifies for Investment 

Assistance under part 307 of this 

chapter; or 

(2) Pursuant to part 307, subpart B, a 

loan or other appropriate assistance to 

non-profit and private for-profit entities. 

(b) All redistributions of Investment 

Assistance made pursuant to this 

section shall be subject to the same 

terms and conditions applicable to the 

Recipient under the original Investment 

Assistance award and must satisfy the 

requirements of PWEDA and of this 

chapter. 

PART 310—SPECIAL IMPACT AREAS 

Sec. 

310.1 Special Impact Area. 

310.2 Pressing need; alleviation of 

unemployment or underemployment. 

Authority: 42 U.S.C. 3154; Department of 

Commerce Organization Order 10–4. 

§ 310.1 Special Impact Area. 

Upon the application of an Eligible 

Recipient, and with respect to that 

Eligible Recipient’s Project only, the 

Assistant Secretary may designate the 

Region which the Project will serve as 

a Special Impact Area if the Eligible 

Recipient demonstrates that its 

proposed Project will: 

(a) Directly fulfill a pressing need and 

(b) Be useful in alleviating or 

preventing conditions of excessive 

unemployment or underemployment, or 

assist in providing useful employment 

opportunities for the unemployed or 

underemployed residents of the Region. 

§ 310.2 Pressing need; alleviation of 

unemployment or underemployment. 

(a) The Assistant Secretary may find 

a pressing need to exist if the Region 

which the Project will serve: 

(1) Has a unique or urgent 

circumstance that would necessitate 

waiver of the CEDS requirements of 

§ 303.7 of this chapter; 

(2) Involves a Project undertaken by 

an Indian Tribe; 

(3) Is rural and severely distressed; 

(4) Is undergoing a transition in its 

economic base as a result of changing 

trade patterns (e.g., the Region is 

certified as eligible by the North 

American Development Bank Program 

or the Community Adjustment and 

Investment Program); 

(5) Exhibits a substantial reliance on 

a natural resource for its economic wellbeing; 

(6) Has been designated as a 

Federally-Declared Disaster area; or 

(7) Has a Special Need. 

(b) For purposes of this part, excessive 

unemployment exists if the twenty-four 

(24) month unemployment rate is at 

least 225% of the national average or the 

per capita income is not more than 50% 

of the national average. A Region 

demonstrates excessive 

underemployment if the employment of 

a substantial percentage of workers in 

the Region is less than full-time or at 

less skilled tasks than their training or 

abilities would otherwise permit. 

Eligible Recipients seeking a Special 

Impact Area designation under this 

criterion must present appropriate and 

compelling economic and demographic 

data. 

(c) Eligible Recipients may 

demonstrate the provision of useful 

employment opportunities by 

quantifying and evidencing the Project’s 

prospective: 

(1) Creation of jobs; 

(2) Commitment of financial 

investment by private entities; or 

(3) Application of innovative 

technology that will lead to the creation 

of jobs or the commitment of financial 

investment by private entities. 

PART 311 [RESERVED] 

PART 312 [RESERVED] 

PART 313 [RESERVED] 

PART 314—PROPERTY 

Subpart A—General 

Sec. 

314.1 Definitions. 

314.2 Federal Interest. 

314.3 Authorized use of Property. 

314.4 Unauthorized Use of Property. 

314.5 Federal Share. 

314.6 Encumbrances. 

Subpart B—Real Property 

314.7 Title. 

314.8 Recorded statement. 

Subpart C—Personal Property 

314.9 Recorded statement—title. 

Subpart D—Release of EDA’s Property 

Interest 

314.10 Procedures for release of EDA’s 

Property interest. 


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Authority: 42 U.S.C. 3211; Department of 

Commerce Organization Order 10–4. 

Subpart A—General 

§ 314.1 Definitions. 

In addition to the defined terms set 

forth in § 300.3 of this chapter, the 

following terms shall have the following 

meanings: 

Adequate Consideration means the 

fair market value at the time of sale or 

lease of any Property, as adjusted, in 

EDA’s sole discretion, by any services, 

property exchanges, contractual 

commitments, acts of forbearance or 

other considerations that are in 

furtherance of the authorized purposes 

of the Investment Assistance, which are 

received by the Recipient or Owner in 

exchange for such Property. 

Disposition or Dispose means the sale, 

lease, abandonment or other disposition 

of any Property and also includes the 

Unauthorized Use of such Property. 

Estimated Useful Life, as used in this 

part, means the period of years that 

constitutes the expected useful lifespan 

of a Project, as determined by EDA, 

during which EDA anticipates obtaining 

the economic development benefits of 

its Investment. 

Federal Interest has the definition 

ascribed to it in § 314.2(a). 

Federal Share has the definition 

ascribed to it in § 314.5. 

Owner means a fee owner, transferee, 

lessee or optionee of any Property. The 

term Owner also includes the holder of 

other interests in a Property where the 

interests are such that the holder 

effectively controls the use of such 

Property. 

Personal Property means all tangible 

and intangible property other than Real 

Property. 

Property means Real Property, 

Personal Property and mixed property. 

Real Property means any land, 

whether raw or improved, and includes 

structures, fixtures, appurtenances and 

other permanent improvements, 

excluding moveable machinery and 

equipment. Real Property includes land 

that is improved by the construction of 

Project infrastructure such as, but not 

limited to, roads, sewers and water lines 

that are not situated on or under the 

land, where the infrastructure 

contributes to the value of such land as 

a specific purpose of the Project. 

Successor Recipient means an EDAapproved transferee of Property 

pursuant to § 314.3(d). A Successor 

Recipient must be an Eligible Recipient 

of Investment Assistance. 

Unauthorized Use means any use of 

Property acquired or improved in whole 

or in part for purposes not authorized by 

EDA Investment Assistance, PWEDA or 

this chapter, as set forth in § 314.4. 

§ 314.2 Federal Interest. 

(a) Property that is acquired or 

improved, in whole or in part, with 

Investment Assistance shall be held in 

trust by the Recipient for the benefit of 

the Project for the Estimated Useful Life 

of the Project, during which period EDA 

retains an undivided equitable 

reversionary interest in the Property (the 

‘‘Federal Interest’’). The Federal Interest 

secures compliance with matters such 

as the purpose, scope and use of a 

Project and is often reflected by a 

recorded lien, statement or other 

recordable instrument setting forth 

EDA’s Property interest in a Project (e.g., 

a mortgage, covenant, or other statement 

of EDA’s Real Property interest in the 

case of a Project involving the 

acquisition, construction or 

improvement of a building. See § 314.8.) 

(b) When the Federal government is 

fully compensated for the Federal Share 

of Property acquired or improved, in 

whole or in part, with Investment 

Assistance, the Federal Interest is 

extinguished and the Federal 

government has no further interest in 

the Property. 

§ 314.3 Authorized Use of Property. 

(a) The Recipient or Owner must use 

any Property acquired or improved in 

whole or in part with Investment 

Assistance only for the authorized 

purpose of the Project and such 

Property must not be Disposed of or 

encumbered without EDA’s prior 

written authorization. 

(b) Where EDA and the Recipient 

determine that Property acquired or 

improved in whole or in part with 

Investment Assistance is no longer 

needed for the original purpose of the 

Investment Assistance, EDA, in its sole 

discretion, may approve the use of such 

Property in other Federal grant 

programs or in programs that have 

purposes consistent with those 

authorized by PWEDA and by this 

chapter. 

(c) Where EDA determines that the 

authorized purpose of the Investment 

Assistance is to develop Real Property 

to be leased or sold, such sale or lease 

is permitted provided it is for Adequate 

Consideration and the sale is consistent 

with the authorized purpose of the 

Investment Assistance and with all 

applicable Investment Assistance 

requirements including but not limited 

to nondiscrimination and 

environmental compliance. 

(d) EDA, in its sole discretion, may 

approve the transfer of any Property 

from a Recipient to a Successor 

Recipient (or from one Successor 

Recipient to another Successor 

Recipient). The Recipient will remain 

responsible for complying with the rules 

of this part and the terms and 

conditions of the Investment Assistance 

for the period in which it is the 

Recipient. Thereafter, the Successor 

Recipient must comply with the rules of 

this part and with the same terms and 

conditions as were applicable to the 

Recipient (unless such terms and 

conditions are otherwise amended by 

EDA). The same rules apply to EDAapproved transfers of Property between 

Successor Recipients. 

(e) When acquiring replacement 

Personal Property of equal or greater 

value than Personal Property originally 

acquired with Investment Assistance, 

the Recipient may, with EDA’s 

approval, trade in such Personal 

Property originally acquired or sell the 

original Personal Property and use the 

proceeds for the acquisition of the 

replacement Personal Property; 

provided that the replacement Personal 

Property is for use in the Project. The 

replacement Personal Property is subject 

to the same requirements as the original 

Personal Property. In extraordinary and 

compelling circumstances, the Assistant 

Secretary may approve the replacement 

of Real Property used in a Project. 

(f) With EDA’s prior written approval, 

a Recipient may undertake an incidental 

use of Property that does not interfere 

with the scope of the Project or the 

economic purpose for which the 

Investment was made; provided that the 

Recipient is in compliance with 

applicable law and the terms and 

conditions of the Investment Assistance, 

and the incidental use of the Property 

will not violate the terms and 

conditions of the Investment Assistance 

or otherwise adversely affect the 

economic useful life of the Property. 

Eligible Applicants and Recipients 

should contact the appropriate regional 

office (whose contact information is 

available via the Internet at http:// 

www.eda.gov) for guidelines on 

obtaining approval for incidental use of 

Property under this section. 

§ 314.4 Unauthorized Use of Property. 

(a) Except as provided in §§ 314.3 

(regarding the authorized use of 

Property) or 314.10 (regarding the 

release of EDA’s interest in certain 

Property), or as otherwise authorized by 

EDA, the Federal government must be 

compensated by the Recipient for the 

Federal Share whenever, during the 

Estimated Useful Life of the Project, any 

Property acquired or improved in whole 

or in part with Investment Assistance is 

Disposed of, encumbered, or no longer 


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used for the purpose of the Project; 

provided that for equipment and 

supplies, the requirements at 15 CFR 

parts 14 or 24, as applicable, including 

any supplements or amendments 

thereto, shall apply. 

(b) Additionally, prior to the release 

of EDA’s interest, Real Property or 

tangible Personal Property acquired or 

improved with EDA Investment 

Assistance may not be used: 

(1) In violation of the 

nondiscrimination requirements of 

§ 302.20 of this chapter or in violation 

of the terms and conditions of the 

Investment Assistance; or 

(2) For any purpose prohibited by 

applicable law. 

(c) Where the Disposition, 

encumbrance or use of any Property 

violates paragraphs (a) or (b) of this 

section, EDA may assert its interest in 

the Property to recover the Federal 

Share for the Federal government and 

may take such actions as authorized by 

PWEDA and this chapter, including but 

not limited to the actions provided in 

§§ 302.3 and 307.21 of this chapter. EDA 

may pursue its rights under paragraph 

(a) of this section and this paragraph (c) 

to recover the Federal Share, plus costs 

and interest. When the Federal 

government is fully compensated for the 

Federal Share, the Federal Interest is 

extinguished as provided in § 314.2(b), 

and EDA will have no further interest in 

the ownership, use or Disposition of the 

Property. 

§ 314.5 Federal Share. 

For purposes of this part, ‘‘Federal 

Share’’ means that portion of the current 

fair market value of any Property (after 

deducting actual and reasonable selling 

and repair expenses, if any, incurred to 

put the Property into marketable 

condition) attributable to EDA’s 

participation in the Project. The Federal 

Share excludes that portion of the 

current fair market value of the Property 

attributable to acquisition or 

improvements before or after EDA’s 

participation in the Project, which are 

not included in the total Project costs. 

For example, if the total Project costs are 

$100, consisting of $50 of Investment 

Assistance and $50 of Matching Share, 

the Federal Share is fifty (50) percent. If 

the Property is disposed of when its 

current fair market is $250, the Federal 

Share is $125 (i.e., fifty (50) percent of 

$250). If $10 is spent to put the Property 

into salable condition, the Federal Share 

is $120 (i.e., fifty (50) percent of ($250–

$10)). 

§ 314.6 Encumbrances. 

(a) General. Except as provided in 

paragraph (b) of this section or as 

otherwise authorized by EDA, 

Recipient-owned Property acquired or 

improved in whole or in part with 

Investment Assistance must not be used 

to secure a mortgage or deed of trust or 

in any way collateralized or otherwise 

encumbered, except to secure a grant or 

loan made by a Federal Agency or State 

agency or other public body 

participating in the same Project. An 

encumbrance includes but is not limited 

to easements, rights-of-way or other 

restrictions on the use of any Property. 

(b) Exceptions. Subject to EDA’s 

approval, which will not be 

unreasonably withheld or unduly 

delayed, paragraph (a) of this section 

does not apply to: 

(1) Recipient-owned Property that is 

subject to an encumbrance at the time 

EDA approves the Project, where EDA 

determines that the requirements of 

§ 314.7(b) are met; 

(2) Encumbrances arising solely from 

the requirements of a pre-existing water 

or sewer facility or other utility 

encumbrances, which by their terms 

extend to additional Property connected 

to such facilities; and 

(3) Encumbrances in cases where all 

of the following are met: 

(i) EDA, in its sole discretion, 

determines that there is good cause for 

a waiver of paragraph (a) of this section; 

(ii) All proceeds secured by the 

encumbrance on the Property shall be 

available only to the Recipient and shall 

be used only for the Project for which 

the Investment Assistance applies or for 

related activities of which the Project is 

an essential part; 

(iii) A grantor/lender will not provide 

funds without the security of a lien on 

the Property; and 

(iv) There is a reasonable expectation, 

as determined by EDA, that the 

Recipient will not default on its 

obligations. 

(c) Encumbering Recipient-owned 

Property, other than as permitted in this 

section, is an Unauthorized Use of the 

Property under § 314.4. 

Subpart B—Real Property 

§ 314.7 Title. 

(a) General. The Recipient must hold 

title to the Real Property required for a 

Project at the time the Investment 

Assistance is awarded or as provided by 

paragraph (c) of this section and must 

maintain title at all times during the 

Estimated Useful Life of the Project, 

except in those limited circumstances as 

provided in paragraph (c) of this 

section. The Recipient must also furnish 

evidence, satisfactory in form and 

substance to EDA, that title to Real 

Property required for a Project (other 

than property of the United States) is 

vested in the Recipient and that any 

easements, rights-of-way, State or local 

government permits, long-term leases or 

other items required for the Project have 

been or will be obtained by the 

Recipient within an acceptable time, as 

determined by EDA. 

(b)(1) The Recipient must disclose to 

EDA all encumbrances, including but 

not limited to the following: 

(i) Liens; 

(ii) Mortgages; 

(iii) Reservations; 

(iv) Reversionary interests; and 

(v) Other restrictions on title or on the 

Recipient’s interest in the Property. 

(2) No encumbrance will be 

acceptable if, as determined by EDA, the 

encumbrance interferes with the 

construction, use, operation or 

maintenance of the Project during its 

Estimated Useful Life. 

(c) Exceptions. The following are 

exceptions to the requirements of 

paragraph (a) of this section that the 

Recipient hold title to the Real Property 

required for a Project. 

(1) Where the acquisition of Real 

Property required for a Project is 

contemplated as part of an Investment 

Assistance award, EDA may determine 

that an agreement for the Recipient to 

purchase the Real Property will be 

acceptable for purposes of paragraph (a) 

of this section if: 

(i) The Recipient provides EDA with 

reasonable assurances that it will obtain 

fee title to the Real Property prior to or 

concurrent with the initial disbursement 

of the Investment Assistance; and 

(ii) EDA, in its sole discretion, 

determines that the terms and 

conditions of the purchase agreement 

adequately safeguard the Federal 

government’s interest in the Real 

Property. 

(2) EDA may determine that a longterm leasehold interest for a period not 

less than the Estimated Useful Life of 

the Real Property required for a Project 

will be acceptable for purposes of 

paragraph (a) of this section if: 

(i) Fee title to the Real Property is not 

otherwise obtainable; and 

(ii) EDA, in its sole discretion, 

determines that the terms and 

conditions of the lease adequately 

safeguard the Federal government’s 

interest in the Real Property. 

(3) When a Project includes 

construction within a railroad’s right-ofway or over a railroad crossing, EDA 

may find it acceptable for the work to 

be completed by the railroad and for the 

railroad to continue to own, operate and 

maintain that portion of the Project, if 

required by the railroad; and provided 


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that, the construction is a minor but 

essential component of the Project. 

(4) When a Project includes 

construction on a State-owned or local 

government-owned highway (i.e., where 

the Recipient is not the State or local 

government owner), EDA may find it 

acceptable for the State or local 

government to own, operate and 

maintain that portion of the Project, if 

required by the State or local 

government; provided that, construction 

is a minor but essential component of 

the Project, the construction is 

completed in accordance with EDA 

requirements, and the State or local 

government provides assurances to EDA 

that the: 

(i) State or local government will 

operate and maintain the improvements 

for the Estimated Useful Life of the 

Project; 

(ii) State or local government will not 

sell the improvements for the Estimated 

Useful Life of the Project; and 

(iii) Use of the Property will be 

consistent with the authorized purposes 

of the Project. 

(5)(i) When an authorized purpose of 

the Project is to construct facilities to 

serve Real Property owned by the 

Recipient, including but not limited to 

industrial or commercial parks, for sale 

or lease to private parties, such sale or 

lease is permitted so long as: 

(A) In cases where an authorized 

purpose of the Project is to sell Real 

Property, the Recipient provides 

evidence sufficient to EDA that it holds 

title to the Real Property required for 

such Project prior to the disbursement 

of any portion of the Investment 

Assistance and will retain title until the 

sale of the Property; 

(B) In cases where an authorized 

purpose of the Project is to lease Real 

Property, the Recipient provides 

evidence sufficient to EDA that it holds 

title to the Real Property required for 

such Project prior to the EDA 

disbursement of any portion of the 

Investment Assistance and will retain 

title for the entire Estimated Useful Life 

of the Project; 

(C) The Recipient completes the 

Project according to the terms of the 

Investment Assistance; 

(D) The sale or lease of any portion of 

the Project during its Estimated Useful 

Life must be for Adequate Consideration 

and the terms and conditions of the 

Investment Assistance and the 

purpose(s) of the Project must continue 

to be fulfilled after such sale or lease; 

provided, however, that EDA may waive 

this provision for any sale or lease 

occurring after the ten (10) year 

anniversary of the award date of the 

Investment Assistance; 

(E) The Recipient agrees that the 

termination, cessation, abandonment or 

other failure on behalf of the Recipient, 

purchaser or lessee to complete the 

Project by the five (5) year anniversary 

of the award date of the Investment 

Assistance constitutes a failure on 

behalf of the Recipient to use the Real 

Property for the economic purposes 

justifying the Project; and 

(F) The Recipient agrees that a 

violation of this paragraph by the 

Recipient, purchaser or lessee 

constitutes an Unauthorized Use of the 

Real Property and the Recipient must 

further agree to compensate EDA for the 

Federal government’s Federal Share of 

the Project in the case of such 

Unauthorized Use. 

(ii) EDA may also condition the sale 

or lease on the satisfaction by the 

Recipient, purchaser or lessee (as the 

case may be) of any additional 

requirements that EDA may impose, 

including but not limited to EDA’s preapproval of the sale or lease. 

(6)(i) When an authorized purpose of 

the Project is to construct facilities to 

serve privately-owned Real Property, 

including but not limited to industrial 

or commercial parks, the ownership, 

sale or lease of such Real Property is 

permitted so long as: 

(A) The Owner provides evidence 

sufficient to EDA that it holds title to 

the Real Property improved or benefited 

by the EDA Investment Assistance prior 

to the disbursement of any portion of 

the Investment Assistance and will 

retain title to the Real Property for the 

entire Estimated Useful Life of the 

Property or until the sale of such Real 

Property; 

(B) The Recipient and the Owner 

agree to use Real Property improved or 

benefited by the EDA Investment 

Assistance only for the authorized 

purposes of the Project and in manner 

consistent with the terms and 

conditions of the EDA Investment 

Assistance for the Estimated Useful Life 

of the Project; 

(C) The Recipient must provide 

adequate assurances that the Owner will 

complete the Project according to the 

terms of the Investment Assistance; 

(D) The sale or lease of any portion of 

the Project during its Estimated Useful 

Life must be for Adequate Consideration 

and the terms and conditions of the 

Investment Assistance and the 

purpose(s) of the Project must continue 

to be fulfilled after such sale or lease; 

provided, however, that EDA may waive 

this provision for any sale or lease 

occurring after the ten (10) year 

anniversary of the award date of the 

Investment Assistance; 

(E) The Recipient agrees that the 

termination, cessation, abandonment or 

other failure on behalf of the Recipient, 

Owner, purchaser or lessee to complete 

the Project by the five (5) year 

anniversary of the award date of the 

Investment Assistance constitutes a 

failure on behalf of the Recipient to use 

the Real Property for the economic 

purposes justifying the Project; and 

(F) The Recipient further agrees that 

a violation of this paragraph by the 

Owner, purchaser or lessee constitutes 

an Unauthorized Use of the Real 

Property and the Recipient must further 

agree to compensate EDA for the Federal 

government’s Federal Share of the 

Project in the case of such Unauthorized 

Use. 

(ii) EDA may also condition its 

Investment Assistance on the 

satisfaction by the Recipient, Owner or 

by the purchaser or lessee (as the case 

may be) of any additional requirements 

that EDA may impose, including but not 

limited to EDA’s pre-approval of a sale 

or lease. 

§ 314.8 Recorded statement. 

(a) For all Projects involving the 

acquisition, construction or 

improvement of a building, as 

determined by EDA, the Recipient shall 

execute a lien, covenant or other 

statement of EDA’s interest in the 

Property acquired or improved in whole 

or in part with the EDA Investment 

Assistance. The statement shall specify 

the Estimated Useful Life of the Project 

and shall include, but not be limited to, 

the Disposition, encumbrance and 

Federal Share requirements. The 

statement shall be satisfactory in form 

and substance to EDA. 

(b) The statement of EDA’s interest 

must be perfected and placed of record 

in the Real Property records of the 

jurisdiction in which the Real Property 

is located, all in accordance with 

applicable law. 

(c) Facilities in which the EDA 

Investment is only a small part of a large 

project, as determined by EDA, may be 

exempted from the requirements of this 

section. 

Subpart C—Personal Property 

§ 314.9 Recorded statement—title. 

For all Projects which EDA 

determines involve the acquisition or 

improvement of significant items of 

Personal Property, including but not 

limited to ships, machinery, equipment, 

removable fixtures or structural 

components of buildings, the Recipient 

shall execute a security interest or other 

statement of EDA’s interest in the 

Personal Property, acceptable in form 


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and substance to EDA, which statement 

must be perfected and placed of record 

in accordance with applicable law, with 

continuances re-filed as appropriate. 

Whether or not a statement is required 

by EDA to be recorded, the Recipient 

must hold title to the Personal Property 

acquired or improved as part of the 

Project, except as otherwise provided in 

this part. 

Subpart D—Release of EDA’s Property 

Interest 

§ 314.10 Procedures for release of EDA’s 

Property interest. 

(a) General. Upon the request of a 

Recipient and before the expiration of 

the Estimated Useful Life of a Project, 

EDA may release any Real Property or 

tangible Personal Property interest held 

by EDA, in connection with Investment 

Assistance after the date that is twenty 

(20) years after the date on which the 

Investment Assistance was awarded. 

(b) Exception. EDA releases all of its 

Real Property and tangible Personal 

Property interests in Projects awarded 

under the Public Works Employment 

Act of 1976 (Pub. L. 94–369), as 

amended by the Public Works 

Employment Act of 1977 (Pub. L. 95–

28). 

(c)(1) Unauthorized Use. 

Notwithstanding the release of EDA’s 

interest pursuant to paragraphs (a) or (b) 

of this section, Real Property or tangible 

Personal Property acquired or improved 

with Investment Assistance may not be 

used: 

(i) In violation of the 

nondiscrimination requirements set 

forth in § 302.20 of this chapter; or 

(ii) For inherently religious activities 

prohibited by applicable Federal law. 

(2) Violation of this paragraph (c) 

constitutes an Unauthorized Use of the 

Real Property or of the tangible Personal 

Property. 

(d) Release. 

(1) Except as provided in paragraph 

(b) of this section, the release of EDA’s 

interest pursuant to this section is not 

automatic; it requires EDA’s approval, 

which will not be withheld except for 

good cause, as determined in EDA’s sole 

discretion. In addition to the restrictions 

set forth in paragraph (c) of this section, 

the release may be conditioned upon 

some activity of the Recipient intended 

to be pursued as a consequence of the 

release. 

(2) When requesting a release of 

EDA’s interest pursuant to paragraph (a) 

of this section, the Recipient will be 

required to disclose to EDA the 

intended future use of the Real Property 

or the tangible Personal Property for 

which the release is requested. 

(i) A Recipient not intending to use 

the Real Property or tangible Personal 

Property for inherently religious 

activities following EDA’s release will 

be required to execute a covenant of use. 

A covenant of use with respect to Real 

Property shall be recorded in the 

jurisdiction where the Real Property is 

located in accordance with § 314.8. A 

covenant of use with respect to items of 

tangible Personal Property shall be 

perfected and recorded in accordance 

with applicable law, with continuances 

re-filed as appropriate. See § 314.9. A 

covenant of use shall (at a minimum) 

prohibit the use of the Real Property or 

the tangible Personal Property: 

(A) For inherently religious activities 

in violation of applicable Federal law; 

and 

(B) For any purpose that would 

violate the nondiscrimination 

requirements set forth in § 302.20 of this 

chapter. 

(ii) EDA may require a Recipient (or 

its successors in interest) who intends 

or foresees the use of Real Property or 

tangible Personal Property for 

inherently religious activities following 

the release of EDA’s interest to 

compensate EDA for the Federal Share 

of such Property. EDA recommends that 

a Recipient who intends or foresees the 

use of Real Property or tangible Personal 

Property (including by successors of the 

Recipient) for inherently religious 

activities to contact EDA well in 

advance of requesting a release pursuant 

to this section. 

PART 315—TRADE ADJUSTMENT 

ASSISTANCE FOR FIRMS 

Subpart A—General Provisions 

Sec. 

315.1 Purpose and scope. 

315.2 Definitions. 

315.3 Confidential Business Information. 

315.4 Eligible petitioners. 

315.5 TAAC scope, selection, evaluation 

and awards. 

315.6 Firm eligibility for Adjustment 

Assistance. 

Subpart B—Certification of Firms 

315.7 Certification requirements. 

315.8 Processing petitions for certification. 

315.9 Hearings. 

315.10 Loss of certification benefits. 

315.11 Appeals, final determinations and 

termination of certification. 

Subpart C—Protective Provisions 

315.12 Recordkeeping. 

315.13 Audit and examination. 

315.14 Certifications. 

315.15 Conflicts of interest. 

Subpart D—Adjustment Proposals 

315.16 Adjustment Proposal Requirements. 

Subpart E—Assistance to Industries 

315.17 Assistance to Firms in importimpacted industries. 

Authority: 42 U.S.C. 3211; 19 U.S.C. 2341 

et seq.; Department of Commerce 

Organization Order 10–4. 

Subpart A—General Provisions 

§ 315.1 Purpose and scope. 

The regulations in this part set forth 

the responsibilities of the Secretary of 

Commerce under chapter 3 of title II of 

the Trade Act concerning Trade 

Adjustment Assistance for Firms. The 

statutory authority and responsibilities 

of the Secretary of Commerce relating to 

Adjustment Assistance are delegated to 

EDA. EDA certifies Firms as eligible to 

apply for Adjustment Assistance, 

provides technical Adjustment 

Assistance to Firms and other 

recipients, and provides assistance to 

organizations representing trade injured 

industries. 

§ 315.2 Definitions. 

In addition to the defined terms set 

forth in § 300.3 of this chapter, the 

following terms used in this part shall 

have the following meanings: 

Adjustment Assistance means 

technical assistance provided to Firms 

or industries under chapter 3 of title II 

of the Trade Act. 

Adjustment Proposal means a 

Certified Firm’s plan for improving its 

economic situation. 

Certified Firm means a Firm which 

has been determined by EDA to be 

eligible to apply for Adjustment 

Assistance. 

Confidential Business Information 

means any information submitted to 

EDA or a TAAC by a Firm that concerns 

or relates to trade secrets for commercial 

or financial purposes, which is exempt 

from public disclosure under 5 U.S.C. 

552(b)(4), 5 U.S.C. 552b(c)(4) and 15 

CFR part 4. 

Contributed Importantly, with respect 

to an Increase in Imports, refers to a 

cause which is important but not 

necessarily more important than any 

other cause. Imports will not be 

considered to have Contributed 

Importantly if other factors were so 

dominant, acting singly or in 

combination, that the worker separation 

or threat thereof or decline in sales or 

production would have been essentially 

the same, irrespective of the influence of 

imports. 

Decreased Absolutely means a Firm’s 

sales or production has declined by a 

minimum of five (5) percent relative to 

its sales or production during the 

applicable prior time period, and: 

(1) Irrespective of industry or market 

fluctuations; and 


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(2) Relative only to the previous 

performance of the Firm. 

Directly Competitive means: 

(1) Articles which are substantially 

equivalent for commercial purposes 

(i.e., are adapted to the same function or 

use and are essentially interchangeable); 

and 

(2) Oil or natural gas (exploration, 

drilling or otherwise produced). 

Firm means an individual 

proprietorship, partnership, joint 

venture, association, corporation 

(including a development corporation), 

business trust, cooperative, trustee in 

bankruptcy or receiver under court 

decree and including fishing, 

agricultural entities and those which 

explore, drill or otherwise produce oil 

or natural gas. For purposes of receiving 

benefits under this part, when a Firm 

owns or controls other Firms, the Firm 

and such other Firms, may be 

considered a single Firm when they 

produce like or Directly Competitive 

articles or are exerting essential 

economic control over one or more 

production facilities. Such other Firms 

include: 

(1) Predecessor—see the following 

definition for Successor; 

(2) Successor—a newly established 

Firm (that has been in business less than 

two years) which has purchased 

substantially all of the assets of a 

previously operating company (or in 

some cases a whole distinct division) 

(such prior company, unit or division, a 

‘‘Predecessor’’) and is able to 

demonstrate that it continued the 

operations of the Predecessor which has 

operated as an autonomous unit, 

provided that there were no significant 

transactions between the Predecessor 

unit and any related parent, subsidiary, 

or affiliate that would have affected its 

past performance, and that separate 

records are available for the 

Predecessor’s operations for at least two 

years before the petition is submitted. 

The Successor Firm must have 

continued virtually all of the 

Predecessor Firm’s operations by 

producing the same type of products, in 

the same plant, utilizing most of the 

same machinery and equipment and 

most of its former workers, and the 

Predecessor Firm must no longer be in 

existence; 

(3) Affiliate—a company (either 

foreign or domestic) controlled or 

substantially beneficially owned by 

substantially the same person or persons 

that own or control the Firm filing the 

petition; or 

(4) Subsidiary—a company (either 

foreign or domestic) that is wholly 

owned or effectively controlled by 

another company. 

Increase in Imports means an increase 

of imports of Directly Competitive or 

Like Articles with articles produced by 

such Firm that Contributed Importantly 

to the applicable Total or Partial 

Separation or threat thereof, and to the 

applicable decline in sales or 

production. 

Like Articles means any articles 

which are substantially identical in 

their intrinsic characteristics. 

Partial Separation means, with 

respect to any employment in a Firm, 

either: 

(1) A reduction in an employee’s work 

hours to eighty (80) percent or less of 

the employee’s average weekly hours 

during the year of such reductions as 

compared to the preceding year; or 

(2) A reduction in the employee’s 

weekly wage to eighty (80) percent or 

less of his/her average weekly wage 

during the year of such reduction as 

compared to the preceding year. 

Person means an individual, 

organization or group. 

Record means any of the following: 

(1) A petition for certification of 

eligibility to qualify for Adjustment 

Assistance; 

(2) Any supporting information 

submitted by a petitioner; 

(3) The report of an EDA investigation 

with respect to petition; and 

(4) Any information developed during 

an investigation or in connection with 

any public hearing held on a petition. 

Significant Number or Proportion of 

Workers means five (5) percent of a 

Firm’s work force or fifty (50) workers, 

whichever is less. An individual farmer 

or fisherman is considered a Significant 

Number or Proportion of Workers. 

Substantial Interest means a direct 

material economic interest in the 

certification or non-certification of the 

petitioner. 

TAAC means a Trade Adjustment 

Assistance Center, as more fully 

described in § 315.5. 

Threat of Total or Partial Separation 

means, with respect to any group of 

workers, one or more events or 

circumstances clearly demonstrating 

that a Total or Partial Separation is 

imminent. 

Total Separation means, with respect 

to any employment in a Firm, the laying 

off or termination of employment of an 

employee for lack of work. 

§ 315.3 Confidential Business Information. 

EDA will follow the procedures set 

forth in 15 CFR 4.9 for the submission 

of Confidential Business Information. 

Submitters should clearly mark and 

designate as confidential any 

Confidential Business Information. 

§ 315.4 Eligible petitioners. 

Eligible petitioners for assistance 

under this part shall be: 

(a) Trade Adjustment Assistance 

Centers (‘‘TAACs’’). A TAAC can be 

a(n): 

(1) University affiliate; 

(2) State or local government affiliate; 

or 

(3) Non-profit organization. 

(b) Firms; or 

(c) Organizations assisting or 

representing industries in which a 

substantial number of Firms or workers 

have been certified as eligible to apply 

for Adjustment Assistance under 

sections 223 or 251 of the Trade Act, 

including: 

(1) Existing agencies; 

(2) Private individuals; 

(3) Firms; 

(4) Universities; 

(5) Institutions; 

(6) Associations; 

(7) Unions; or 

(8) Other non-profit industry 

organizations. 

§ 315.5 TAAC scope, selection, evaluation 

and awards. 

(a) TAAC purpose and scope. 

(1) TAACs are available to assist 

Firms in obtaining Adjustment 

Assistance in all fifty (50) U.S. States, 

the District of Columbia and the 

Commonwealth of Puerto Rico. TAACs 

provide Adjustment Assistance in 

accordance with this part either through 

their own staffs or by arrangements with 

outside consultants. Information 

concerning TAACs serving particular 

areas may be obtained from the TAAC 

Web site at http://www.taacenters.org or 

from EDA. See the applicable FFO for 

the appropriate points of contact and 

addresses. 

(2) Prior to submitting a petition for 

Adjustment Assistance to EDA, a Firm 

should determine the extent to which a 

TAAC can provide the required 

Adjustment Assistance. EDA will 

provide Adjustment Assistance through 

TAACs whenever EDA determines that 

such assistance can be provided most 

effectively in this manner. Requests for 

Adjustment Assistance will normally be 

made through TAACs. 

(3) TAACs generally provide 

Adjustment Assistance to a Firm by 

providing the following: 

(i) Assistance to a Firm in preparing 

its petition for certification; 

(ii) Assistance to a Certified Firm in 

diagnosing its strengths and weaknesses 

and developing its Adjustment 

Proposal; and 

(iii) Assistance to a Certified Firm in 

the implementation of its Adjustment 

Proposal. 


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(b) TAAC selection. 

(1) EDA invites currently funded 

TAACs to submit either new or 

amended applications; provided they 

have performed in a satisfactory manner 

and complied with previous and/or 

current conditions in their Cooperative 

Agreements with EDA and contingent 

upon availability of funds. Such TAACs 

shall submit an application on a form 

approved by OMB, as well as a 

proposed budget, narrative scope of 

work, and such other information as 

requested by EDA. Acceptance of an 

application or amended application for 

a Cooperative Agreement does not 

assure funding by EDA. 

(2) EDA may invite new TAAC 

proposals through an FFO. If such a 

proposal is acceptable, EDA will invite 

an application on a form approved by 

OMB. An application will require a 

narrative scope of work, proposed 

budget and such other information as 

requested by EDA. Acceptance of an 

application does not assure funding by 

EDA. 

(c) TAAC evaluation. 

(1) EDA generally evaluates currently 

funded TAACs based on: 

(i) Performance under Cooperative 

Agreements with EDA and compliance 

with the terms and conditions of such 

Cooperative Agreements; 

(ii) Proposed scope of work, budget 

and application or amended 

application; and 

(iii) Availability of funds. 

(2) EDA generally evaluates new 

TAACs based on: 

(i) Competence in administering 

business assistance programs; 

(ii) Background and experience of 

staff; 

(iii) Proposed scope of work, budget 

and application; and 

(iv) Availability of funding. 

(d) TAAC award requirements. 

(1) EDA generally funds TAACs for 

twelve (12) months. 

(2) There are no Matching Share 

requirements for Adjustment Assistance 

provided by the TAACs to Firms for 

certification or for administrative 

expenses of the TAACs. 

§ 315.6 Firm eligibility for Adjustment 

Assistance. 

(a) Firms participate in the Trade 

Adjustment Assistance for Firms 

program in accordance with the 

following: 

(1) Firms apply for certification 

through a TAAC by completing a 

petition for certification. The TAAC will 

assist Firms in completing such 

petitions (at no cost to the Firms); 

(2) Firms certified in accordance with 

the procedures described in §§ 315.7 

and 315.8 must prepare an Adjustment 

Proposal for Adjustment Assistance 

from the TAAC, and submit it to EDA 

for approval; and 

(3) EDA determines whether the 

Adjustment Assistance requested in the 

Adjustment Proposal is eligible based 

upon the evaluation criteria set forth in 

subpart D of this part. A Certified Firm 

may submit a request to the TAAC for 

Adjustment Assistance to implement an 

approved Adjustment Proposal. 

(b) For certification, EDA evaluates 

Firms’ petitions strictly on the basis of 

fulfillment of the requirements set forth 

in § 315.7. 

(c) (1) Firms generally receive 

Adjustment Assistance over a two-year 

(2) period. 

(2) Matching Share requirements are 

as follows: 

(i) Each Firm must pay at least 

twenty-five (25) percent of the cost of 

the preparation of its Adjustment 

Proposal. Each Firm requesting $30,000 

or less in total Adjustment Assistance in 

its approved Adjustment Proposal must 

pay at least twenty-five (25) percent of 

the cost of that Adjustment Assistance. 

Each Firm requesting more than $30,000 

in total Adjustment Assistance in its 

approved Adjustment Proposal must 

pay at least fifty (50) percent of the cost 

of that Adjustment Assistance. 

(ii) Organizations representing tradeinjured industries must pay at least fifty 

(50) percent of the total cash cost of the 

Adjustment Assistance, in addition to 

appropriate in-kind contributions. 

Subpart B—Certification of Firms 

§ 315.7 Certification requirements. 

(a) EDA may certify a Firm as eligible 

to apply for Adjustment Assistance 

under section 251(c) of the Trade Act if 

it determines that the petition for 

certification meets one of the 

requirements set forth in paragraph (b) 

of this section. In order to be certified, 

a Firm must meet the criteria listed 

under any one of the three (3) 

circumstances in paragraph (b) of this 

section. 

(b)(1) Twelve-month (12) decline. 

Based upon a comparison of the most 

recent twelve-month (12) period for 

which data are available and the 

immediately preceding twelve-month 

(12) period: 

(i) A Significant Number or 

Proportion of Workers in the Firm has 

undergone Total or Partial Separation or 

a Threat of Total or Partial Separation; 

(ii) Either sales or production of the 

Firm has Decreased Absolutely; or sales 

or production, or both, of any article 

that accounted for not less than twentyfive (25) percent of the total production 

or sales of the Firm during the twelvemonth (12) period preceding the most 

recent twelve-month (12) period for 

which data are available have Decreased 

Absolutely; and 

(iii) An Increase in Imports has 

occurred; or 

(2) Interim sales or production 

decline. Based upon an interim sales or 

production decline: 

(i) Sales or production has Decreased 

Absolutely for, at minimum, the most 

recent six-month (6) period during the 

most recent twelve-month (12) period 

for which data are available as 

compared to the same six-month (6) 

period during the immediately 

preceding twelve-month (12) period; 

(ii) During the same base and 

comparative period of time as sales or 

production has Decreased Absolutely, a 

Significant Number or Proportion of 

Workers in such Firm has undergone 

Total or Partial Separation or a Threat 

of Total or Partial Separation; and 

(iii) During the same base and 

comparative period of time as sales or 

production has Decreased Absolutely, 

an Increase in Imports has occurred; or 

(3) Interim employment decline. 

Based upon an interim employment 

decline: 

(i) A Significant Number or 

Proportion of Workers in such Firm has 

undergone Total or Partial Separation or 

a Threat of Total or Partial Separation 

during, at a minimum, the most recent 

six-month (6) period during the most 

recent twelve-month (12) period for 

which data are available as compared to 

the same six-month (6) period during 

the immediately preceding twelvemonth (12) period; and 

(ii) Either sales or production of the 

Firm has Decreased Absolutely during 

the twelve-month (12) period preceding 

the most recent twelve-month (12) 

period for which data are available; and 

(iii) An Increase in Imports has 

occurred. 

§ 315.8 Processing petitions for 

certification. 

(a) Firms shall consult with a TAAC 

for guidance and assistance in the 

preparation of their petitions for 

certification. 

(b) A Firm seeking certification shall 

complete a Petition by a Firm for 

Certification of Eligibility to Apply for 

Trade Adjustment Assistance (Form 

ED–840P or any successor form) with 

the following information about such 

Firm: 

(1) Identification and description of 

the Firm, including legal form of 

organization, economic history, major 

ownership interests, officers, directors, 

management, parent company, 


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Subsidiaries or Affiliates, and 

production and sales facilities; 

(2) Description of goods and services 

produced and sold; 

(3) Description of imported Directly 

Competitive or Like Articles with those 

produced; 

(4) Data on its sales, production and 

employment for the two most recent 

years; 

(5) One (1) copy of a complete 

auditor’s certified financial report for 

the entire period covering the petition, 

or if not available, one (1) copy of the 

complete profit and loss statements, 

balance sheets and supporting 

statements prepared by the Firm’s 

accountants for the entire period 

covered by the petition; publicly-owned 

corporations should submit copies of 

the most recent Form 10–K annual 

reports (or Form 10–Q quarterly reports, 

as appropriate) filed with the U.S. 

Securities and Exchange Commission 

for the entire period covered by the 

petition; 

(6) Information concerning its major 

customers and their purchases (or its 

bids, if there are no major customers); 

and 

(7) Such other information as EDA 

considers material. 

(c) EDA shall determine whether the 

petition has been properly prepared and 

can be accepted. Promptly thereafter, 

EDA shall notify the petitioner that the 

petition has been accepted or advise the 

TAAC that the petition has not been 

accepted, but may be resubmitted at any 

time without prejudice when the 

specified deficiencies have been 

corrected. Any resubmission will be 

treated as a new petition. 

(d) EDA will publish a notice of 

acceptance of a petition in the Federal 

Register. 

(e) EDA will initiate an investigation 

to determine whether the petitioner 

meets the requirements set forth in 

section 251(c) of the Trade Act and 

§ 315.7. 

(f) A petitioner may withdraw a 

petition for certification if EDA receives 

a request for withdrawal before it makes 

a certification determination or denial. 

A Firm may submit a new petition at 

any time thereafter in accordance with 

the requirements of this section and 

§ 315.7. 

(g) Following acceptance of a petition, 

EDA will: 

(1) Make a determination based on the 

Record as soon as possible after the 

petitioning Firm or TAAC has submitted 

all material. In no event may the 

determination period exceed sixty (60) 

days from the date on which EDA 

accepted the petition; and 

(2) Either certify the petitioner as 

eligible to apply for Adjustment 

Assistance or deny the petition. In 

either event, EDA shall promptly give 

written notice of action to the petitioner. 

Any written notice to the petitioner or 

any parties as specified in § 315.10(d) of 

a denial of a petition shall specify the 

reason(s) for the denial. A petitioner 

shall not be entitled to resubmit a 

petition within one (1) year from the 

date of denial, provided, EDA may 

waive the one-year (1) limitation for 

good cause. 

§ 315.9 Hearings. 

EDA will hold a public hearing on an 

accepted petition if the petitioner, or 

any person, organization, or group 

found by EDA to have a Substantial 

Interest in the proceedings, submits a 

request for a hearing no later than ten 

(10) days after the date of publication of 

the Notice of Acceptance in the Federal 

Register, under the following 

procedures: 

(a) The petitioner and other interested 

Persons shall have an opportunity to be 

present, to produce evidence and to be 

heard; 

(b) A request for public hearing must 

be delivered by hand or by registered 

mail to EDA. A request by a Person 

other than the petitioner shall contain: 

(1) The name, address and telephone 

number of the Person requesting the 

hearing; and 

(2) A complete statement of the 

relationship of the Person requesting the 

hearing to the petitioner and the subject 

matter of the petition, and a statement 

of the nature of its interest in the 

proceedings. 

(c) If EDA determines that the 

requesting party does not have a 

Substantial Interest in the proceedings, 

a written notice of denial shall be sent 

to the requesting party. The notice shall 

specify the reasons for the denial; 

(d) EDA shall publish a notice of a 

public hearing in the Federal Register, 

containing the subject matter, name of 

petitioner, and date, time and place of 

the hearing; and 

(e) EDA shall appoint a presiding 

officer for the hearing who shall 

respond to all procedural questions. 

§ 315.10 Loss of certification benefits. 

A Firm may fail to obtain benefits of 

certification, regardless of whether its 

certification is terminated, for any of the 

following reasons: 

(a) Failure to submit an acceptable 

Adjustment Proposal within two (2) 

years after date of certification. While 

approval of an Adjustment Proposal 

may occur after the expiration of such 

two-year (2) period, a Firm must submit 

an acceptable Adjustment Proposal 

before such expiration; 

(b) Failure to submit documentation 

necessary to start implementation or 

modify its request for Adjustment 

Assistance consistent with its 

Adjustment Proposal within six (6) 

months after approval of the Adjustment 

Proposal, where two (2) years have 

elapsed since the date of certification. If 

the Firm anticipates needing a longer 

period to submit documentation, it 

should indicate the longer period in its 

Adjustment Proposal. If the Firm is 

unable to submit its documentation 

within the allowed time, it should 

notify EDA in writing of the reasons for 

the delay and submit a new schedule. 

EDA has the discretion to accept or 

refuse a new schedule; 

(c) EDA has denied the Firm’s request 

for Adjustment Assistance, the time 

period allowed for the submission of 

any documentation in support of such 

request has expired, and two (2) years 

have elapsed since the date of 

certification; or 

(d) Failure to diligently pursue an 

approved Adjustment Proposal where 

two (2) years have elapsed since the 

date of certification. 

§ 315.11 Appeals, final determinations and 

termination of certification. 

(a) Any petitioner may appeal in 

writing to EDA from a denial of 

certification, provided that EDA 

receives the appeal by personal delivery 

or by registered mail within sixty (60) 

days from the date of notice of denial 

under § 315.8(g). The appeal must state 

the grounds on which the appeal is 

based, including a concise statement of 

the supporting facts and applicable law. 

The decision of EDA on the appeal shall 

be the final determination within the 

Department. In the absence of an appeal 

by the petitioner under this paragraph, 

the determination under § 315.8(g) shall 

be final. 

(b) A Firm, its representative or any 

other interested domestic party 

aggrieved by a final determination 

under paragraph (a) of this section may, 

within sixty (60) days after notice of 

such determination, begin a civil action 

in the United States Court of 

International Trade for review of such 

determination, in accordance with 

section 284 of the Trade Act. 

(c) Whenever EDA determines that a 

Certified Firm no longer requires 

Adjustment Assistance or for other good 

cause, EDA will terminate the 

certification and promptly publish 

notice of such termination in the 

Federal Register. The termination will 

take effect on the date specified in the 

published notice. 


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(d) EDA shall immediately notify the 

petitioner and shall state the reasons for 

any termination. 

Subpart C—Protective Provisions 

§ 315.12 Recordkeeping. 

Each TAAC shall keep records that 

fully disclose the amount and 

disposition of Trade Adjustment 

Assistance program funds so as to 

facilitate an effective audit. 

§ 315.13 Audit and examination. 

EDA and the Comptroller General of 

the United States shall have access for 

the purpose of audit and examination to 

any books, documents, papers, and 

records of a Firm, TAAC or other 

recipient of Adjustment Assistance 

pertaining to the award of Adjustment 

Assistance. 

§ 315.14 Certifications. 

EDA will provide no Adjustment 

Assistance to any Firm unless the 

owners, partners, members, directors or 

officers thereof certify: 

(a) The names of any attorneys, 

agents, and other Persons engaged by or 

on behalf of the Firm for the purpose of 

expediting applications for such 

Adjustment Assistance; and 

(b) The fees paid or to be paid to any 

such Person. 

§ 315.15 Conflicts of interest. 

EDA will provide no Adjustment 

Assistance to any Firm under this part 

unless the owners, partners, or officers 

execute an agreement binding them and 

the Firm for a period of two (2) years 

after such Adjustment Assistance is 

provided, to refrain from employing, 

tendering any office or employment to, 

or retaining for professional services any 

Person who, on the date such assistance 

or any part thereof was provided, or 

within one (1) year prior thereto, shall 

have served as an officer, attorney, 

agent, or employee occupying a position 

or engaging in activities which involved 

discretion with respect to the provision 

of such Adjustment Assistance. 

Subpart D—Adjustment Proposals 

§ 315.16 Adjustment Proposal 

Requirements. 

EDA evaluates Adjustment Proposals 

based on the following: 

(a) EDA must receive the Adjustment 

Proposal within two (2) years after the 

date of the certification of the Firm; 

(b) The Adjustment Proposal must 

include a description of any Adjustment 

Assistance requested to implement such 

proposal, including financial and other 

supporting documentation as EDA 

determines is necessary, based upon 

either: 

(1) An analysis of the Firm’s 

problems, strengths and weaknesses and 

an assessment of its prospects for 

recovery; or 

(2) If EDA so determines, other 

available information; 

(c) The Adjustment Proposal must: 

(1) Be reasonably calculated to 

contribute materially to the economic 

adjustment of the Firm (i.e., that such 

proposal will constructively assist the 

Firm to establish a competitive position 

in the same or a different industry); 

(2) Give adequate consideration to the 

interests of a sufficient number of 

separated workers of the Firm, by 

providing, for example, that the Firm 

will: 

(i) Give a rehiring preference to such 

workers; 

(ii) Make efforts to find new work for 

a number of such workers; and 

(iii) Assist such workers in obtaining 

benefits under available programs; and 

(3) Demonstrate that the Firm will 

make all reasonable efforts to use its 

own resources for its recovery, though 

under certain circumstances, resources 

of related Firms or major stockholders 

will also be considered; and 

(d) The Adjustment Assistance 

identified in the Adjustment Proposal 

must consist of specialized consulting 

services designed to assist the Firm in 

becoming more competitive in the 

global marketplace. For this purpose, 

Adjustment Assistance generally 

consists of knowledge-based services 

such as market penetration studies, 

customized business improvements, and 

designs for new products. Adjustment 

Assistance does not include 

expenditures for capital improvements 

or for the purchase of business 

machinery or supplies. 

Subpart E—Assistance to Industries 

§ 315.17 Assistance to Firms in importimpacted industries. 

(a) Whenever the International Trade 

Commission makes an affirmative 

finding under section 202(B) of the 

Trade Act that increased imports are a 

substantial cause of serious injury or 

threat thereof with respect to an 

industry, EDA shall provide to the 

Firms in such industry assistance in the 

preparation and processing of petitions 

and applications for benefits under 

programs which may facilitate the 

orderly adjustment to import 

competition of such Firms. 

(b) EDA may provide Adjustment 

Assistance, on such terms and 

conditions as EDA deems appropriate, 

for the establishment of industry-wide 

programs for new product development, 

new process development, export 

development or other uses consistent 

with the purposes of the Trade Act and 

this part. 

(c) Expenditures for Adjustment 

Assistance under this section may be up 

to $10,000,000 annually per industry, 

subject to availability of funds, and shall 

be made under such terms and 

conditions as EDA deems appropriate. 

Dated: September 19, 2006. 

Benjamin Erulkar, 

Deputy Assistant Secretary and Chief 

Operating Officer, Economic Development 

Administration. 

[FR Doc. 06–8035 Filed 9–26–06; 8:45 am] 

BILLING CODE 3510–24–P 


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